Both the boards and the manager, Baillie Gifford, believe the reductions are necessary to improve the trusts’ competitiveness with open-ended funds and to take advantage of the equality between products created by the RDR.
Pacific Horizon Investment, Edinburgh Worldwide Investment, Baillie Gifford Japan and Baillie Gifford Shin Nippon trusts have agreed on a uniform scale for investment management and administration fees.
The tiered approach is based on net assets and will be levied at each quarter end. The trusts will be charged an annual fee of 0.95% on the first £50m and 0.65% on assets above £50m, Baillie Gifford said.
The asset manager has also agreed to absorb the expected cost of complying with the AIFMD.
James Budden, director of retail marketing and distribution at Baillie Gifford, said: “We are reducing our fears because we are committed to the long-term future of the trusts we manage and want them to remain competitive in the new RDR world.
“Scottish Mortgage Investment Trust with total assets of £2.6bn has an ongoing charge of just 0.51% but for smaller investment trusts the environment has now become very challenging in pricing terms. The investment trust industry needs to take initiative and embrace the opportunity RDR affords and get competitive,” he added
