The new charge for the China investment trust will take effect from 1 April, the same day that the trust’s manager Anthony Bolton is set to leave the firm.
The AMC will decrease to 1% per annum, from the current rate of 1.2%. Additionally, the performance fee cap, covered at 1.5%, will be cut to 1% from 1 April. Clients are charged only if the portfolio’s yield tops 2% of the return from the MSCI China Index during the financial year of the trust.
“We have seen significant changes to pricing following the introduction of the Retail Distribution Review. As a result, we felt this was the right time to review the fees to ensure Fidelity China Special Situations remains competitive,” John Owen, chairman of the China Special Situations trust, said.
Investment trust novice Dale Nicholls is set to take over the fund from Bolton. He has been with Fidelity for the past 17 years, and also runs the Fidelity Funds – Asian Smaller Companies Fund.
The Japanese Values investment trust is cutting its AMC to 0.85% from the current 1%, and the fee reduction has been backdated to 1 January.
“Over the course of the last year, the company has grown significantly in terms of assets under management, both as a result of improved market sentiment in Japan, and as a result of shareholders exercising their subscription rights prior to their expiry in February 2013. This, coupled with increasing competition following the Retail Distribution Review, has meant that the Board and Fidelity felt this was the right time to review the company’s fees to ensure they remain competitive,” David Robins, chairman of Fidelity Japanese Values trust, said.
The Japanese Values PLC NAV is managed by Shinji Higaki since July 2007 and is up 26.7% in the three years to 18 March, according to FE analytics.
“Good news” for investors
“This is good news for investors in these trusts although these fees are still high compared to many clean share classes on open ended funds, “according to Jason Hollands, managing director at Bestinvest.
“In our view investment trust boards need to wake up to the new reality of unbundled, or “clean” share classes on open ended funds which has left many closed end companies and trusts looking relatively expensive.”
He added that fees are one of many factors that should be considered when weighting up the merits of an investment.
“Trusts have other advantages over open ended funds, such as the ability to use gearing. However, we do believe that when reviewing management contracts, boards should give strong consideration to the increased cost competitiveness of comparable open ended funds and be prepared to renegotiate fund manager fees downwards for the benefit of their shareholders.”
