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Bennett's Henderson European trust cuts charges but keeps performance fee
by Robert St George on Nov 01, 2013 at 14:22
Other Henderson trusts have recently dropped these performance fees while raising their annual management charges.
The giant City of London Investment Trust, for instance, hiked its charge from 0.35% to 0.365% of its assets up to £1 billion. The base charge for the Bankers Investment Trust has climbed from 0.3% to 0.45%.
The Henderson European Focus Trust has, though, brought the annual cap on the maximum total fee – which includes the performance element – down from 1.75% to 1.30% of net assets.
The trust’s board argued that ‘the amended fee basis represents good value for shareholders and will continue to incentivise the manager’.
Charles Cade, head of investment companies research at Numis, was supportive of the move. ‘There have been numerous management fee changes within the sector this year as boards have sought to ensure that their funds are competitive with other structures following the RDR,’ he said.
‘In many cases, however, this has resulted in higher base fees and the removal of the performance fee, which may well result in a higher expense ratio, particularly if the previous performance fee was under water,’ Cade noted.
‘Unlike some industry commentators, we do not believe that all performance fees should be abolished. Indeed, we feel that performance incentives can be good for shareholders, as long as they are well structured and are offset by a lower base fee rather than just being a free option on the upside.’
Over the past three years Bennett (pictured) has delivered a total return of 55.8% compared with 24.8% from its benchmark FTSE World Europe excluding the UK index.
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by James Phillipps on Dec 09, 2013 at 07:52