RBS closes cautious funds that lost investors money

Royal Bank of Scotland (RBS), the state-owned bank, has closed two 'mixed asset' funds less than two years after their launch after they failed to shield investors from the turbulent stock markets.

The £50 million Volatility Controlled Balanced Managed and the £49 million Volatility Controlled Cautious Managed  funds were launched in January last year and were meant to limit the volatility of the stock market by investing in a range of asset classes. 

However, despite tracking 11 indices following equities, property, bonds and commodities, the Volatility Controlled Balanced Managed fund lost 8.2%, while the Volatility Controlled Cautious Managed fund lost 10.05%, far worse than comparable funds.

A spokesman for RBS said: ‘Following a review undertaken by Royal Bank of Scotland Markets & International Banking, it was decided to close the Volatility Controlled Cautious fund and the Volatility Controlled Balanced fund (sub-funds of Brushfield Defined Funds),’ he said. ‘The Financial Services Authority approved the application to formally terminate the funds on 9 October and investors' units were redeemed at net asset value on 11 October.’

If you are interested in mixed asset funds our Mixed Assets league tables shows which funds are doing best and which worst across five sectors.