Wealth Manager - the site for professional investment managers

Register to get unlimited access to 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

Mark Asquith
Mark Asquith
6/10 in Equity - Global Emerging Markets Smaller Companies (Performance over 3 years) Average Total Return: 12.31%
Edward Robertson
Edward Robertson
36/82 in Equity - Global Emerging Markets (Performance over 3 years) Average Total Return: 1.86%
Edward Lam
Edward Lam
9/82 in Equity - Global Emerging Markets (Performance over 3 years) Average Total Return: 12.68%
Citywire TV
Brewin's Gutteridge: Yuan direction

Brewin's Gutteridge: Yuan direction

This week Brewin Dolphin's research head chats to Fidelity Asian Investment Directors Jenny Lee and Gary Monaghan about the big changes in China.

Play On the Road Challenge: horsing around on the polo pitch

On the Road Challenge: horsing around on the polo pitch

Libby Ashby takes to the polo pitch with Stuart Leigh-Davies from Redmayne-Bentley for an 'On the Road' challenge.

Brewin's Gutteridge: where Miton's Godber sees value

Brewin's Gutteridge: where Miton's Godber sees value

This week Brewin Dolphin's research head talks to George Godber, co-lead fund manager of the Miton UK Value Opportunities fund, about value investing.

Your Business: Cover Star Club

Profile: what tempted Brewin's Glasgow team over to Rathbones?

Profile: what tempted Brewin's Glasgow team over to Rathbones?

Rathbones’ Glasgow office has only been open for three months but the team, led by Angus Kerr, has already attracted new clients

Wealth Manager on Twitter
Video: On the Road in...Jersey

Video: On the Road in...Jersey

  • Investment Committee: Deon Gouws, Credo Wealth

    Investment Committee: Deon Gouws, Credo Wealth

  • On the Road Challenge: horsing around on the polo pitch

    On the Road Challenge: horsing around on the polo pitch

  • Investment Committee: Simon James, Gore Browne

    Investment Committee: Simon James, Gore Browne

  • Room 101: three wealth managers reveal their pet peeves

    Room 101: three wealth managers reveal their pet peeves

  • On the road challenge: bring on the wall!

    On the road challenge: bring on the wall!

  • A Day in the Life of John Dance

    A Day in the Life of John Dance

  • Meet Wealth Manager's latest recruit: Ted Monroe

    Meet Wealth Manager's latest recruit: Ted Monroe

  • 1 Comment Investment Committee: Hilary Coghill, City Asset Management

    Investment Committee: Hilary Coghill, City Asset Management

  • Le Tour – One Day Ahead: crossing the finish line

    Le Tour – One Day Ahead: crossing the finish line

  • Smith & Williamson's long-term goals for sports star clientele

    Smith & Williamson's long-term goals for sports star clientele

  • Investment Committee: Jason Day, Standard Life Wealth

    Investment Committee: Jason Day, Standard Life Wealth

  • Investment Committee: John Moore, Brewin Dolphin

    Investment Committee: John Moore, Brewin Dolphin

  • Thesis’ Yousafzai on the virtues of ethical investing

    Thesis’ Yousafzai on the virtues of ethical investing

  • Liver Birds land at CISI Liverpool event to support industry’s next generation

    Liver Birds land at CISI Liverpool event to support industry’s next generation

  • Room 101: three wealth managers reveal their top gripes

    Room 101: three wealth managers reveal their top gripes

  • Investment Committee: Deon Gouws, Credo Wealth

    Investment Committee: Deon Gouws, Credo Wealth

  • Book Review: New Fund Order: A Digital Death for Fund Selection?

    Book Review: New Fund Order: A Digital Death for Fund Selection?

  • At the Hampton Court flower show with Vestra Wealth

    At the Hampton Court flower show with Vestra Wealth

  • Investment Committee: Simon James, Gore Browne Investment Management

    Investment Committee: Simon James, Gore Browne Investment Management

  • A day in the life of Sue Evans

    A day in the life of Sue Evans

  • -->