Monks IT adds tiered charging in £500k fee cut

Baillie Gifford’s £1.5bn Monks Investment Trust is launching a tiered charging structure to pass on economies of scale gained from its large size back to its investors.

Monks IT adds tiered charging in £500k fee cut

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The trust will continue to charge its current fee of 0.45% on its first £750m of assets, but from May 1 the fee on assets above that level will reduce to 0.33%.

The cut is expected to reduce the trust’s overall ongoing charge by 0.04% and save its investors roughly £500,000 a year. 

It comes amid public outcry about the fees charged by some funds in the UK, with critics arguing funds should drop their fees when they reach a certain size because many of the costs of managing a portfolio are fixed. 

The FCA is currently conducting its Market Study of Asset Management, with issues under investigation including the possibility that the industry does a poor job of passing on scale benefits to clients. 

Bailie Gifford’s move follows the introduction of similar structures on some of its other trusts including its £5.1bn Scottish Mortgage Investment Trust. 

 

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