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Baillie Gifford cuts Scottish Mortgage fees
by Robert St George on Mar 03, 2014 at 09:46
Baillie Gifford has reduced charges on the £3.1 billion Scottish Mortgage investment trust.
The manager has stuck to a pledge it made in January. From early April Baillie Gifford’s annual remuneration for managing the fund will fall from 0.32% to 0.3%.
‘Both the board and managers are keenly aware that low charges have a major impact on long-term returns, especially when compounding is taken into account,’ said chairman John Scott.
Scott added that ‘further reductions would be considered if assets continue to grow’.
Managed by James Anderson (pictured) and Tom Slater, Scottish Mortgage has been the top performer in its AIC Global sector over the past five years, returning 314% on a share-price basis compared with a peer-group average of 147%.
Charles Cade, head of investment companies research at Numis Securities, welcomed the move. 'It is refreshing to see the manager cut fees and it should have the effect of reducing the ongoing charges ratio to under 0.5%, from 0.51% in the last financial year,' he commented.
'We believe that Scottish Mortgage is well positioned to be a beneficiary of the retail distribution review given its large size, strong track record and low fees.'
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