Five trusts on an attractive discount
Over the past few years, multi-asset managers have increasingly turned to investment trusts as a way...
Baillie Gifford is reducing the investment management fee on its Elite Rated Japanese fund.
Effective from 1 October 2017, the annual management charge will fall from 0.65% to 0.6% and the ongoing charge fee will fall from 0.68% to 0.63%. Baillie Gifford plans to lower the fees of 19 other equity funds by similar amounts.
The fee reductions are part of Baillie Gifford’s continued strategy to offer active management to investors at an attractive price, where fund scale and ongoing costs allow. Baillie Gifford previously adopted a tiered approach to fees across its range of investment trusts, announcing a fee reduction for Elite Rated Scottish Mortgage Investment Trust earlier this year.
Andrew Telfer, joint senior partner at Baillie Gifford, said: “Sharing economies of scale with investors as funds grow is one way in which Baillie Gifford looks to deliver ongoing value for clients. Meeting all research costs internally is another. We believe that keeping costs low, maintaining high active share, low turnover and engaging with the management of companies in which we invest are key ingredients of a successful active manager.”
Darius McDermott, managing director of FundCalibre added: “Baillie Gifford is leading the way by cutting fees on quality actively managed funds. Any cuts in fund fees must be applauded, and when these cuts are on funds with excellent performance, even more so. It’s not just a marketing gimmick to attract more money, it is genuinely in the interest of investors.
“Fees are important when considering a fund, as they form a part of the total return that investors receive. That said, it is not the only consideration. Historic alpha generation and repeatability of process are also important factors. When we award funds with an Elite Rating, we look at the value a fund manager adds consistently, after fees have been paid.”