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Guinness slashes fee on global income fund to 0.25%
by Danielle Levy on Nov 08, 2012 at 08:16
Guinness Asset Management is cutting the management fee on Citywire AA-rated Matthew Page’s Global Equity Income fund to 0.25%.
Company founder Tim Guinness (pictured) said the cut, from a previous minimum charge of 0.75% on its RDR share class and 1.5% on its retail share class, was motivated by the realities of more competitive pricing post-RDR.
The $24.1 million (£15.1 million) Guinness Global Equity Income fund , co-managed by Ian Mortimer, will be available at the discounted rate either to the end of March or until it reaches $150 million. The discount will be made permanent for charity investors, however.
Guinness said the fund, which launched at the end of 2010, had been seeded with internal money but the firm is now looking to attract further assets.
He added that the strategy was nimble in comparison to competitors and has a focus on dividend growth rather than simply targeting high dividend paying companies.
‘We are going to a clean fee basis post-RDR on all of our funds and we will price in line with the markets for specialist products,’ said Guinness.
‘This fund is mainstream and I think you have got to recognise that some of our competitors have very large funds and [we have] ETFs as competitors. In my view, you have got to come up with a charging structure that can justify the value that active management can add.’
The founder also pointed out the firm’s advantage as relatively new entrant which allows flexibility on pricing.
‘I am indifferent if I have £150 million at 25 basis points or £50 million at 75 basis points,’ Guinness added.Since launch, Mortimer and Page have posted an 8.2% return with the fund, while the MSCI World Index rose 4.14% over the same period, according to Lipper. The fund is yielding around 3.5% and is targeting growth of 7%-10% per year. The fund has a total expense ratio of 0.74%.
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