Securities Trust of Scotland rejigs fees
The board of the Securities Trust of Scotland investment trust has scrapped its performance fees, opting to increase its base fee instead.
The trust, which has been managed by Martin Currie’s Alan Porter since August 2011, has raised it annual management fee to 0.6 per cent of net asset a year, up from 0.3 per cent.
In a market statement, the board said it had negotiated the changes with Martin Currie and they were effective from April 1.
The change to the trust’s fee arrangements is the second in a year. Originally, there were two elements to the performance fee, which was measured against the fund’s peer group and against the FTSE All Share index of UK equities.
However, the fee was changed on August 1 last year when the fund changed its mandate from UK growth and income to global growth and income, with Mr Porter taking over from Ross Watson.
The trust also changed its benchmark from the FTSE All-Share index to the MSCI World High Dividend Yield index.
At that time the performance fee was changed to 20 per cent of the net asset value’s (NAV) outperformance of the capital returns on the MSCI World High Dividend Yield index, with an annual cap of 1 per cent of net assets.
However, no performance fee was paid for the period to March 31 2012 as the manager waived the right to receive the fees during this initial period.
Charles Cade, head of investment trust research at Numis Securities, said that while the decision bucked the prevailing trend in the investment trust sector, it was a “sensible move” as the MSCI World High Dividend Yield index is not a benchmark that is widely used by investors.
He added that the rise in the base fee still made the trust competitive.