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Throgmorton 'fan club' set to expand with fee and benchmark revamp
by Sarah Miloudi on Sep 25, 2013 at 17:02
BlackRock's Throgmorton Trust is set to become the latest closed-end fund to trim its charges.
Following the likes of Bankers Investment Trust, JP Morgan Mid Cap and a string of Baillie Gifford funds moving to reduce their fees, the £223 million smaller companies trust has proposed to reduce its performance fee cap to no more than 2%. It currently runs on a sliding scale of up to 3.5%.
Historically, Throgmorton, which is also proposing to change its name to the BlackRock Throgmorton Trust and to switch its benchmark from the Numis Smaller Companies Plus AIM (ex investment companies) Index to the Numis Smaller Companies ex AIM Index, has been regarded as one of the more expensive options within its sector. However clever shorts and stocks picked by managers Richard Plackett and Mike Prentis have also ensured the trust is the best-performer in its peer group over five years, having grown its net asset value (NAV) per share by 170.1%.
Its closest rival in terms of NAV returns is the BlackRock Smaller Companies Trust, which is also managed by Prentis, and has posted NAV growth of 155.1% over five years, according to Citywire data.
Speaking to Wealth Manager, Prentis (pictured) said that the change in performance fee cap was aimed at simplifying the trust's cost, while the switch in benchmark was a 'little evolutionary step' that would better represent the lions share of companies within Throgmorton's portfolio, even if it also halved its alternative investment market (AIM) share allowance from 40% of the portfolio to 20%.
Simon White, BlackRock's head of investment trusts, added that the name change underlined Throgmorton's reputation as a standout pick within the smaller companies universe, particularly in the wake of the retail distribution review (RDR) with a growing number of advisers and investors keen to select investment trusts with solid brands.
White said: 'We are seeing a big rise in interest and having BlackRock in the name helps.
'The Throgmorton contracts for difference (CFD) portfolio is also becoming more understood and it's been very successful,' he continued, adding that while Throgmorton, which was taken on by Plackett and Prentis five years ago, already had its own 'fan club', the investment house's global brand is highly respected and worth leveraging off in the post-RDR world.
All of the changes will be proposed to shareholders at a general meeting in November.
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on Dec 06, 2013 at 14:28