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City of London trust axes performance fee
by James Phillipps on Jul 31, 2013 at 11:19
The City of London investment trust has overhauled its charging structure, removing its performance fee in a bid to broaden its appeal.
The trust will now carry an annual management fee of 0.365%, reducing to 0.35% on the balance of net assets above £1 billion. The board believes the changes to its pricing will make the £1.01 billion trust more competitive against open-ended funds with clean or super-clean charges.
City of London previously levied a performance fee if it outperformed its benchmark by 15% or more over a rolling three year period, capped to a maximum management fee of 0.65% of net assets.
The trust, managed by Henderson Global Investors' Job Curtis (pictured), is up 21.9% over one year in share price terms compared to a 16.6% rise in the FTSE 100 and it is currently trading on a premium to net asset value of 2.7%. The trust has grown its dividend for 46 consecutive years and is currently yielding 3.9%.
The move follows a similar management fee revamp of Bankers Investment Trust, which is run by Henderson's Alex Crooke.
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