The director of closed-end fund research has spoken out following the announcement that a number of investment trust managers are lowering their fees, or are introducing a tiered fee system that will reduced the fees over time.
The Fidelity China Special Situations Fund is reducing its management fee by 30 basis points to 1.2%, making it more competitive in comparison to its Morningstar China Equity category peers, despite its performace fee.
Baille Gifford, meanwhile, is cutting the management fee on four of its investment trusts having agreed a uniform scale with all four boards. For three of the funds, the fee will fall from 1% to 0.95% on the first £50m, and 0.65% thereafter. All funds have a value exceeding £50m so all shareholders will benefit.
The fourth fund’s headline rate does go up on the first £501m, but as the fund has reached over £200m, the overall fee should go down as the tiering kicks in. The performance fee is also being scrapped.
Jackie Beard said: “The reduction of charges at these funds has a direct benefit to shareholders. While it’s not yet clear what the full impact of the RDR is on fund fees generally, we are pleased to see these funds making an early decision and adding to their competitive edge."
