Welcome to our new website! Let us know what you think..

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

Somerset Capital chief: Why we’ve imposed dilution levies

Dominic Johnson, founding partner and chief executive of Somerset Capital Management, has decided to introduce dilution levies across its fund range.

From 23 June 2014, a dilution levy of 30 basis points will be applied to Somerset’s Global Emerging Markets fund, 40 basis points to Emerging Markets Dividend Growth, and of 50 basis points to Emerging Markets Small Cap.

Each highly performing fund is run by a star Citywire AA-rated manager: respectively, Edward Robertson, Edward Lam and Mark Asquith. The size of the dilution levy reflects the liquidity of each portfolio, and it is paid into the fund – not to Somerset.

Other mechanisms, such as bid/offer pricing, can have the same effect of protecting unitholders from the costs of other investors trading in and out of the fund, so Johnson shares Somerset’s rationale for taking this path.

Johnson also reveals why Somerset opted for this approach to managing flows rather than launching investment trusts with fixed asset pools – despite his belief that ‘all fund managers would love to have a closed-ended fund’.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

Related Fund Managers

Edward Robertson
Edward Robertson
23/71 in Equity - Global Emerging Markets (Performance over 3 years) Average Total Return: 16.43%
Edward Lam
Edward Lam
8/71 in Equity - Global Emerging Markets (Performance over 3 years) Average Total Return: 24.23%
Mark Asquith
Mark Asquith
7/71 in Equity - Global Emerging Markets (Performance over 3 years) Average Total Return: 24.76%
Your Business: Cover Star Club

Profile: why Chris Wyllie joined Connor Broadley

Profile: why Chris Wyllie joined Connor Broadley

Professional footballers are not renowned for their financial acumen, but former Millwall player James Connor is an exception to the rule

Wealth Manager on Twitter