The AMC hike is part of an overall charges review at Standard Life Investments (SLI), in which nine funds in total are affected. However, the higher than average annual fee on Nimmo’s portfolio may be constructive in SLI’s plans to limit flows into his fund. Originally the group had intended to close the portfolio at the end of June but has since pushed this back to 29 August.
At £1.27bn the SLI small cap fund is twice the size of the next largest portfolio in the IMA UK Smaller Companies peer group, FE data shows.
Nimmo’s style is to allow his winning stocks to drift up in size as they perform and as such the portfolio is now 50% in mid-caps. However, the group says that level remains below his benchmark’s 70% weighting to the FTSE 250.
Five of the group’s bond portfolios will also see their annual fees move up on 1 November: Global Index-linked Bond, UK Gilt, Corporate Bond, Select Income and Higher Income. All five have existing AMC’s of just 0.95% for retail investors and will move to 1%. According to SLI some of the funds have been at that level for 16 years. Jacquie Kerr, head of UK wholesale at SLI, says: “This is a level which we believe is consistent with other funds offering similar market exposure and remains competitive on an overall TER basis.”
The remaining fund affected by the rate changes is SLI Global Equity Unconstrained. Like Nimmo’s portfolio, in November the fund will feature a retail annual fee of 1.60%. SLI notes the rationale for the higher fee for Unconstrained is due to its profile as a premium product. Kerr adds: “The UK Smaller Company & Global Equity Unconstrained funds both offer a high conviction management style targeting a high level of alpha.”
Investors are to be given written notification of the AMC changes on 11 July.
