OMAM announces changes to Old Mutual UK Select Smaller Companies Fund

Old Mutual Asset Managers (UK) Ltd (‘OMAM’) announces that in order to ensure that the Old Mutual UK Select Smaller Companies Fund is best positioned to continue to deliver strong performance, it will limit the number of units in issue to 350 million units.
This change will take effect from 15 December 2006.

The number of units in issue as at 7 November 2006 was 318 million and the fund size was £454 million.

The Old Mutual UK Select Smaller Companies Fund is the best performing fund in the IMA UK Smaller Companies sector over two, three and five years and is ranked second over the year to date and over one year. The fund has achieved a return of 204.7% over five years compared with a return of 87.3% from the sector average. Over the last year the fund has delivered a return of 40.9% compared with a return of 24.4% from the sector average. (Source: Standard & Poor’s, bid to bid, net income reinvested, UK sterling, periods to 31/10/06.)

The fund, managed by Daniel Nickols, has a AAA-rating from independent ratings agencies Standard & Poor’s and Forsyth-OBSR while Daniel has a AAA Citywire Fund Manager rating.

OMAM believes the fund’s future performance would be constrained if the size of the fund was allowed to grow unchecked and therefore believes this change is in the best interests of all unitholders.

To provide a balance for OMAM’s prospective loss of income due to the introduction of a limit on the number of units in issue, the management fee is being increased from 1.5% per annum to 1.75% per annum. This change will take effect from 1 February 2007.

Matthew Nagele, Director of Sales at OMAM, comments: “This is a fund with outstanding performance, managed by an outstanding investment team. The decision to introduce a limit has been taken to protect the interests of investors by ensuring that the size of the fund remains at a level at which it is best placed to continue to deliver strong performance.

Capacity management in order to aid liquidity and performance is still a relatively new concept among unit trusts and OEICs, but has been widely used elsewhere within the investment industry for many years.

“The revised annual management fee is designed to compensate for loss of revenue resulting from the limit in the number of units.”