Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Allianz cuts tech trust fees after huge 2013 payout

Allianz cuts tech trust fees after huge 2013 payout

The RCM Technology Trust has lowered both its annual management charge and its performance fee.

The £147 million fund, managed by Allianz, has cut its annual charge from 1% to 0.8% and its performance fee from 20% of outperformance to 12.5%, capped at 2.25% of net assets.

‘These new arrangements continue to give substantial incentives to the manager but are more closely in line with current practice in the investment trust market,’ said chairman David Quysner.

In RCM’s most recent financial year, ended 30 November 2013, Allianz earned a performance fee worth £6.1 million – equivalent to 4.6% of net assets.

During the period RCM, managed by Walter Price (pictured), returned 47.2% on a net asset value basis while its benchmark Dow Jones World Technology index rose by 20.5%.

‘The reduction in fees is positive for investors,’ commented Charles Cade, head of investment companies research at Numis Securities.

‘There has been an increasing trend of simplifying fee structures, demonstrated by the removal of performance fees by 13 funds since the start of 2013.

'We do not believe that all investment companies should necessarily remove performance fees. Indeed, there is an inherent appeal that managers are able to share in the upside so long as there is compensation in terms of a lower base fee,’ Cade added.

‘The key is for incentive fees to be carefully constructed to ensure that they do not simply reward luck or encourage managers to take excessive risks.

'This includes the selection of an appropriate benchmark, the inclusion of caps and high watermarks, and considering appropriate measurement periods.’

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Potential US rate rise, cheap oil & the Europe opportunity

Potential US rate rise, cheap oil & the Europe opportunity

This week we analyse the implications of a possible rise in US interest rates, the impact of cheap oil and the European equity opportunity.  

Play Carmignac's Crowl: what QE could mean for Europe

Carmignac's Crowl: what QE could mean for Europe

The ECB is widely expected to finally fire its QE gun this week. Carmignac's Sandra Crowl discusses the implications for the eurozone.

Play Grexit worries, currency wars and a grizzly outlook for 2015?

Grexit worries, currency wars and a grizzly outlook for 2015?

The first Investment Pulse of the year looks at the potential impact of Greece leaving the euro, volatility in currency markets and the UK’s economic prospects.

Your Business: Cover Star Club

Profile: DIY investing is biggest threat to industry, says Whitechurch

Profile: DIY investing is biggest threat to industry, says Whitechurch

The industry is at risk of pushing potential investors down the DIY route unless it does more to make its services accessible says the Whitechurch Securities boss

Wealth Manager on Twitter