Unlike a bank, Margetts do not hold client assets on our balance sheet.
Each of the Margetts funds is held by the trustee/depositary. Bank of New York Mellon Ltd which is one of the biggest trustee and custodians in the world. The assets held by Bank of New York Mellon Ltd are ring fenced as a separate legal entity, with the exception of some cash which is held on deposit with the Bank of New York Mellon Ltd.
In the very unlikely event that Margetts fails, the most likely action would be that the Bank of New York Mellon would appoint a replacement manager, or return your investment plus any gain or loss.
There should be no direct effect from this action other than the normal movements of the underlying assets and a change in management.
Margetts are a profitable growing fund manager. As a regulated firm we are also required to hold reserves, which in a worst case scenario would allow the firm to close in an orderly fashion. In the very unlikely event that Bank of New York Mellon fails, the most likely action would be that the funds are moved to another trustee/depositary and there could be a short delay in your ability to trade in or out of the fund.
A small proportion of the cash held in the Margetts funds is on deposit with the Bank of New York Mellon Ltd and therefore this could be potentially lost should the bank fail, as would be the case for any deposit with a bank.
Cash only represents part of the asset allocation of the funds and Margetts have spread any excess cash into AAAm rated money market funds to increase diversification.
Unit trusts/OEICS are regarded as one of the most secure asset structures within the UK market and whilst an absolute guarantee cannot be provided, the level of security is very high. The funds are UK Authorised Collective Investment Schemes and are authorised and regulated by the Financial Conduct Authority.
In the unlikely event of a failure, which causes a loss, Margetts are part of the Financial Services Compensation Scheme.