St James’s Place suspends trading in property fund https://t.co/cbwtFfOPc4 open ended funds sound great until they’re closed
— Henry Tapper (@henryhtapper) October 24, 2023
You can call it a unit trust or call it an LTAF;-whatever you call it – a gated open ended fund is closed in everything but name.
If you want to trade open ended funds, then you should think twice, they’re not the harmless entities they’re dressed up as. Whether they come wrapped by an insurer, re-wrapped by reinsurance or part of mixed, multi-asset , diversified or multi-strategy product, an open-ended fund is only as liquid as its underlying investments and if more people want to sell than buy, then an open-ended fund is in trouble.
St James’ Place today, M&G yesterday – who knows who tomorrow? Don’t rush for the door as there’s already a queue.
Labelling matters to a degree, but what really matters is that people have their own investment philosophy and investment principles that mean they invest suitably. Trading funds can be part of how you go about building up your wealth but it’s a strategy that has its own risks. “Safe as houses” in the long-term, but remember pensioners “you can’t buy a sausage with a brick”.