Devon have recently announced the capping of the Alpha Fund, with no new applications able to be accepted.
The background for this decision is explained below by Alpha Fund portfolio manager, Slade Robertson:
"It is with a strong desire to maintain the market leading performance of the Alpha Fund that we have decided to close the fund to new applications. In my opinion, this is a very positive announcement for all existing unit holders as it will ensure that I am able to maintain the level of flexibility required to manage this fund in accordance with your expectations. As you are all aware, the Alpha Fund is a concentrated portfolio that represents our best ideas. The number of stocks that can be held at any one time is limited to 15. When strong risk adjusted returns are not available, the fund holds cash until we have sufficient conviction in new investment opportunities. This is a highly concentrated approach to portfolio construction and as such we are very conscious of the portfolio's size and its effect on liquidity. In practice this means that I want to be able to purchase and sell stocks for your fund in the most optimal manner and in making the decision to cap the fund I believe I will be able to achieve this on an on-going basis. Ultimately I hope this will be reflected in strong medium to long-term returns for unit holders".
As a result of this announcement by Devon, RaboDirect has removed the Alpha Fund from the RaboDirect investment menu, with no new customer applications able to be accepted into the fund.
At this stage, all Devon's other retail Funds remain open to new applications, including the newly added Devon Equity Income Fund, and follow Devon's same underlying research and investment processes.
Should you have any queries, please don't hesitate to contact us on 0800 22 44 33 between 8am and 7pm Monday to Friday or email email@example.com.
The RaboDirect Team