The value of your investment can go up or down, and you may get back less than you invested. Nothing in this article is investment, tax or legal advice. |
A mutual fund liquidation happens when the fund closes. In a cash liquidation, the fund sells its assets and returns the available proceeds to eligible investors.
We process the liquidation automatically. You do not need to place a sell order to receive a liquidation payment.
Mutual funds are available to UK residents only and are being rolled out gradually, so they may not be available to you yet. If you're eligible but don't have access yet, you can join the waitlist in the app and we'll let you know when access becomes available to you.
How will this affect my investment?
Cash is credited to your account, and your fund units are updated in accordance with the fund's instructions.
A payment can close some, all or none of your remaining units. Cash payments and unit closures can happen at different times. Units may also be removed without an additional cash payment.
If only part of your position is closed, the closure is calculated using the units you still hold at that time.
If you hold the fund in an Invest account, liquidation payments may be treated as a sale of all or part of your holding and may realise a gain or loss for tax purposes, even though you did not choose to sell. If you're unsure how this affects you, consider seeking independent tax advice.
Can I receive more than one payment?
Yes. A liquidation may involve one payment or several payments over time:
- Interim: A partial payment while the liquidation continues. Further payments are expected.
- Final: A payment described by the fund as its final liquidation payment. This does not automatically mean all your units are closed.
- Residual: A later payment from remaining assets, reserves or recoveries. You may receive this after a final payment, even if your position has already been closed.
How are the payments calculated?
The fund manager decides how much is paid out in each payment, based on the eligible units held. For interim and final payments, that's the units you hold just before each payment. For residual payments, it's the units you held when the liquidation began, so you may still receive a residual payment after all your units have been closed.
💡 Example
You have 100 eligible units when the liquidation takes effect.
The first payment received is for an interim liquidation, where the fund manager pays £2.00 per unit while closing 40% of your holdings, giving you £200 and closing 40 units. You now have 60 units left.
The second payment received is for a final liquidation, in which the fund manager pays £3.00 per remaining unit while closing 100% of your remaining holdings, yielding £180 and closing the remaining 60 units. You no longer hold any units in the fund.
The third payment received is a residual payment, where the fund manager pays £0.50 per original eligible unit. This is based on the 100 units you held when the liquidation began, giving you £50 even though all your units have already been closed.
You receive £430 in total across the three payments.
When will I receive the cash?
Payment dates and amounts depend on the fund's liquidation process.
The liquidation's effective date is not necessarily the date you receive the cash. If there are several payments, they may arrive on different dates.
Can I still buy or sell the fund?
Subscriptions and redemptions may be restricted before the liquidation takes effect. The last dates for subscriptions and redemptions may differ.
Will I be notified?
We will notify you after each liquidation event has been processed.