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Home > Investments > Multi-Manager Funds

By Bradley Gerrard | Published Sep 28, 2012

Aberdeen slashes fund of funds fees as price war hots up

Aberdeen Asset Management is pricing the RDR-ready share classes on its multi-manager fund range at ultra-cheap levels, following similar moves from rivals.

The firm, which runs more than £7bn in assets, is launching commission-free shares on its long-only multi-manager funds that carry annual management charges of just 0.5 per cent.

Investment Adviser also revealed last week that F&C cut the (AMC) on its risk-rated Lifestyle fund range run by multi-managers Gary Potter and Rob Burdett from 0.6 per cent to 0.5 per cent.

In January, Cazenove Capital Management announced it would offer retail investors a 0.5 per cent annual charge on its multi-manager funds for purchases through a platform.

The multi-manager price war follows a spate of criticism of multi-manager funds’ tendency to be relatively expensive compared to non multi-manager funds, in terms of their total expense ratios.

It also comes as providers scrap to secure a slice of the adviser outsourcing market, which is growing ahead of the implementation of the RDR at the end of the year. RDR-ready shares on most non-multi-manager funds are being priced at 0.75 per cent industrywide.

Earlier this month, Jupiter launched a new Merlin Conservative fund which will carry an annual management charge that is 0.25 percentage points cheaper than its standard charge.

Aberdeen senior portfolio manager Scott Spencer (pictured) said charges on multi-manager funds had “always been an issue”.

“We have listened to that, and with the help of Aberdeen’s distribution and sales team came up with a 50 basis points structure which removes the issues clients have had with multi-manager,” he said.

Mr Spencer said the move would “significantly” lower the funds’ ongoing charges - formerly known as the total expense ratio.

“It will definitely look a lot more compelling compared with the majority of the peer group,” he said.

He added the way the funds are run would not change.

“There will be no change in the underlying management of the funds and we will still be biased towards boutiques and active managers,” he said.

“We won’t be saying because we are cheaper we will use exchange traded funds and passive investments. The style and management will be exactly the same.”

Aberdeen Asset Management long-only multi-manager funds

Aberdeen Multi-Manager Balanced Managed

Aberdeen Multi-Manager Cautious Managed

Aberdeen Multi-Manager Ethical

Aberdeen Multi-Manager Constellation

Aberdeen Multi-Manager Diversified Alpha

Aberdeen Multi-Manager Equity Managed

Aberdeen Multi-Manager Multi-Asset Distribution

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