COVID-19 FAQs

 

1. With the current restrictions on movement in place, how are the fund managers able to run the funds when not in the office?

When working from home, all fund managers have access to the same systems and controls which they would normally have when working in the office. Rathbones’ fund managers are equipped with full dealing capabilities to ensure continuous management of the funds. This means fund managers will continue to manage the funds as usual with the same access to research, trading, dealing, compliance, governance, risk controls and all other functions to maintain the high standards you have come to expect.

 

2. Does working from home create increased investment or operational risks?

As a priority, RUTM will maintain complete continuity of oversight, governance and compliance to ensure risk will not increase whilst the fund managers are working remotely. The fund managers will continue to manage the funds in strict accordance with their mandates.

 

3. In light of the market conditions, how are fund managers monitoring liquidity in the funds?

We have been monitoring the liquidity of our funds to ensure we are able to meet any client redemptions. Liquidity means how easily we can buy and sell investments, which impacts how easy it is for us to raise cash if an investor wants to redeem their investment. Market events like the impact of COVID-19 can make assets which are normally easy to buy and sell, much harder. All our funds are generally very ‘liquid’, which means the underlying investments can be bought and sold easily. In events such as this markets can act in unusual ways, so we will continue to monitor this closely.

 

4. With volatility in the markets, how are you ensuring investors are receiving the correct unit pricing?

We have multiple measures in place to protect our investors. These measures ensure that those who are buying and selling units in our funds receive a fair price and that those who remain invested are treated fairly.

We have multiple measures in place to protect our investors. These measures ensure that those who are buying and selling units in our funds receive a fair price and that those who remain invested are treated fairly. 

Our Product Governance Committee have declared the impact of COVID-19 a ‘material event’. This means we are continually assessing the risks and impacts to our investors, our communication plans and, given the nature of this unprecedented situation, whether our procedures remain adequate. 

Our funds price at midday, once a day. This means that we snapshot the price of all the underlying investments at midday, so when you buy or sell units in our funds, everyone buys and sells at the same price. When our funds price at midday, the price recorded for the investments in the US is the previous day’s closing price. This happens because the New York Stock Exchange doesn’t open until 9.30am EST or 1.30pm GMT, which is after we snapshot our funds price. With the large changes in the US market over the last week, on occasion we have delayed releasing the price of our funds for a few hours to adjust the price to account for large changes in the US stock market. This means everyone buys and sells at a fair price which accurately reflects the market.

 

5. Given the extent of the market movements in recent weeks, how will Rathbone Funds be impacted by the position of the wider Rathbones Group?

Rathbones maintains a conservative balance sheet and a strong regulatory capital position. The business is primarily funded by equity, with only a small amount of debt finance. As well as the mandatory regulatory capital buffers we are required to hold by the Prudential Regulation Authority, the group also maintains internal buffers to hold against volatility such as the market conditions recently experienced. In our preliminary announcement for 2019 (found here) we reported treasury assets of over £2.8 billion, of which £1.9 billion was held on deposit with the Bank of England. You can find further details here.

 

6. Why will fund reports be late?

On 23 March 2020, the Financial Conduct Authority (FCA) requested that all listed companies observe a moratorium on the publication of their annual results as a result of uncertainty caused by the Coronavirus. Following this, the major audit firms in the UK have implemented a two week freeze on signing audit opinions for all entities, until early April.

While annual reports have been completed without issue, there will be an industry-wide delay until the end of this freeze and when the audit opinion can be signed. We are, of course, monitoring this situation.

We would also remind you to be especially aware of fraud during these unprecedented times. The City of London Police has issued an alert that fraudsters are exploiting the COVID-19 pandemic to facilitate fraud and cybercrime. They advise that you should not click on links or attachments in suspicious emails, and never respond to unsolicited messages and calls that ask for your personal or financial details. 

We continue to be fully operational, working remotely, with all trading, risk, and compliance procedures running normally.

 

​7. Who should i contact at Rathbones if i have a question? 

Rathbones are committed to maintaining the service our clients and investors have come to expect. The distribution team is operating as normal in all respects and so please contact your usual representative. If you do not have a regular contact at Rathbones, please contact the Distribution Desk on 0207 399 0399. This means you can always speak to your team at Rathbones.