At a time when the ailing unit trust industry is showing signs of renewed vigour, wellknown Anglo-American fund manager Invesco has raised eyebrows by planning to close 10 funds at one go.

Investors of the 10 funds - valued at about $80 million - will be told within the next 10 days that they will have three months to liquidate their investments, several industry players told Today.

Those affected will have to sell their holdings at whatever prices the market offers.

For the past few days, Invesco’s senior managers have been meeting the funds’ distributors to explain the closure. One industry source said the lack of viability of Invesco’s retail unit trust operations was cited as a reason for the move.

Since their launch in 2000, nine of the 10 funds have lost money - the biggest loser being GT North America Fund. It is now down 66.4 per cent since its inception. The only star performer is the GT Bond Fund, up 29.6 per cent.

“Because of the established Invesco name, investors will be taken aback by the impending funds’ closure,” said Ms Grace Chua, assistant manager, unit trusts at Phillip Capital, one of the funds’ distributors.

However, one analyst is not surprised by the funds’ impending closure. Mr Andrew Liew, head of consumer banking at ABN AMRO, another fund distributor, said: “The industry has undergone a major trauma through depressed economic sentiments. So, I am not surprised that some fund managers will scale down or pull out altogether.”

Wealth management firm, DollarDEX.com, another of the funds’ distributors, downplayed the impact of the move. “We think the impact is minimal because the mood seems to be turning up, so this will come to pass soon,” a DollarDEX official said.

But he admitted that the timing is “unfortunate” given that unit trust investments appear to be turning the corner. Still, DollarDEX does not rule out the possibility of Invesco returning. “Considering that Invesco is a large global fund manager, we shouldn't discount their coming back,” the official said.

It is understood that Invesco has received regulatory approval to sell several offshore funds which will be available to retail and institutional investors.

These offshore funds are expected to offer lower charges than those of the 10 funds which Invesco plans to close.

While Invesco’s $80million worth of unit trusts is small beer compared to the industry’s total value of about $10 billion, the closure of the 10 funds is likely to lead some retail investors to reassess their faith in unit trusts, long regarded as a safe, albeit boring, investment vehicle.

If anything, they will now keep a watchful eye on how big the fund is. Analysts say a fund needs to be worth at least $20 million to survive closure.