Euro Global Liquidity Fund update

November 2021

Some of your clients may have part or all of their Standard Life policy invested in the Euro Global Liquidity Fund (EGLF) (which is wholly invested in the Aberdeen Standard Liquidity Fund (Lux) Euro). While this fund is not a capital protected product, it aims to preserve capital and produce a return in line with euro money market rates, before charges. However, it is currently yielding a negative return.

This situation is due to a combination of factors including negative interest rates, low to negative bond yields and fund charges.

The underlying fund invests in, but is not limited to, fixed deposits and certificates of deposit, commercial paper, floating rate notes, European government bonds and other types of bonds.

The current yield is -0.50% and given that the Annual Management Charge is 1%, there is a strong probability that the fund will continue to generate a net negative return until we see a significant increase in interest rates.

This is a key challenge in today’s market and there are no easy solutions.  Each client’s situation is different. The Standard Life policy they hold with us may only be a small part of their overall portfolio, so they may be quite happy to retain their investment in the fund.  For those clients who are looking for long term growth with their pension or investment holding, they may need to take some risk to have the opportunity for positive returns.

As a product provider, we believe it’s important for us to highlight this situation to our advisers.

If you would like further information on our range of funds available to your clients, please visit the Fund Centre on brokerzone or speak with your Business Manager.