Top UK smaller companies fund reopens for business

The fund, which manages £1.4bn of investors' money, also appears to be available on the Charles Stanley Direct investment platform.

Previously, the fund was "soft-closed", meaning that existing investors were still able to add to their holdings in the fund but new investors were required to pay an upfront charge. This usually happens when a fund has reached capacity and taking any more money would compromise the manager’s method of running the fund, potentially affecting returns.

The UK Smaller Companies fund shrank in size when the soft closure was announced, but has since recovered. It has had a small net inflow of £1.4m over the past year, according to figures from FE Trustnet. During "soft closure" it remained available on the Standard Life platform.

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Experts questioned how long it would take for the fund to soft close once again.

Damien Fahy of fundexpert.co.uk said: “There’s a good chance they could see any size limit hit fairly swiftly. Hargreaves Lansdown controls the direction of a lot of investor money so what will they do when some of their select 27 funds are forced to close?”

A spokesman for Standard Life Investments said: “The positive returns of the UK equity market over the past couple years have increased the average capitalisation and liquidity of the market, and this, coupled with outflows resulting from the fund’s soft closure in 2011, has freed up some capacity in the fund.

“In making this additional capacity available, we are first and foremost focused on protecting the interests of current fund investors, who will continue to benefit from manager Harry Nimmo’s long-term low turnover investment process. Harry will remain focused on producing consistent and reliable performance over the cycle.”

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