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New Star has announced two fund mergers:
- New Star Japan will merge into New Star Pacific Growth
- New Star North American will merge into New Star American Portfolio
These proposed mergers represent a significant change
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The New Star Pacific Growth Fund does not have the power to invest in Japan, so anyone who purchased New Star Japan specifically for access to that market will find they are no longer invested there. Furthermore, the countries in which the Pacific Growth Fund invests are emerging markets and therefore can be considered higher risk.
The New Star North American Fund, like most funds, invests directly in shares. By contrast, the New Star American Portfolio is a fund of funds; in other words instead of buying shares it simply invests in other funds. In addition, New Star American Portfolio also has the freedom to invest in Central and South America – this again represents a move towards higher risk.
In our opinion investors affected by these mergers should consider whether the broader remit and greater risk of the merged fund is suitable for them. Those who wish to switch out before the merger may find the Wealth 150, a list of our favourite funds in each sector, a good starting point for choosing a replacement.
The mergers are subject to unitholder approval. If approval is granted they will take place on 13 June 2008.
» Key Features of the New Star Japan Fund
» Key Features of the New Star Pacific Growth Fund
» Key Features of the New Star North American Fund
» Key Features of the New Star American PortfolioFund research is provided by Hargreaves Lansdown. Hargreaves Lansdown is an independent broker offering unit trust, stockbroking and other pension and investment services. No news or research item is a personal recommendation to deal.