SCM Private closes multi-asset ETF owing to lack of investor interest

Aug 28th, 2015 | By | Category: Alternatives / Multi-Asset

SCM Private, a London-based wealth management firm co-founded by former New Star CIO Alan Miller, has announced the closure of the db X-trackers SCM Multi Asset ETF, the first ETF of ETFs to be launched in the UK.

SCM Private closes multi-asset ETF owing to lack of investor interest

Alan Miller, Founding Partner and Chief Investment Officer, SCM Private.

The ETF, which launched in March 2012 in partnership with Deutsche Bank‘s db X-trackers platform, aimed to provide inflation-beating returns through an actively managed tactical allocation to different ETFs, as directed by Miller.

The fund, which had performed relatively well following its launch, was offered as a means of obtaining broad diversification but more cheaply than traditional fund of funds due to the low-cost nature of ETFs.

Speaking after the fund posted a return of 7.85% on the one-year anniversary of its launch, Alan Miller said: “Our aim is to generate consistent outperformance on a risk-adjusted basis, and I’m pleased to see that we’re meeting that challenge. Dynamic asset allocation, as opposed to individual stock and bond picking, is gaining in prominence, and as more people migrate towards self-directed investing, we hope many more investors will consider this as an attractive alternative to traditional fund-of-funds, but with significantly lower and more transparent costs.”

The commercial success of that fund was not to be, however, with assets under management falling below £500,000, rendering the fund economically unviable.

The closure of the ETF is only one of a number of products liquidated by Deutsche Bank this month as the German bank reviews the popularity and viability of its product suite. Altogether, 18 ETFs were shut down in August, with a further 43 share classes de-listed.

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