InvestmentsJul 30 2014

Schroder Income Growth trust scraps performance fee

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The £200.6m Schroder Income Growth trust has become the latest investment trust to remove its performance fee and simplify its charging structure.

The investment trust, which is managed by Schroders’ Sue Noffke, has replaced its previous fee arrangements with a flat annual charge of 0.75 per cent.

The trust had previously been entitled to a fee of 10 per cent of the net revenue return for the year after tax, plus a fee of 0.375 per cent on assets up to and including £75m, 0.35 per cent on the next £50m and 0.325 per cent on anything above £125m.

In addition to this tiered charging structure, the trust had also been entitled to a performance fee measured as 5 per cent of any outperformance above the FTSE All-Share.

The board of the trust claimed that if the new fee had been in place for the year to the end of August 2013 it would have reduced the total payout to Schroders by £188,000.

Many investment trusts have been scrapping their performance fee and simplifying their charges in recent years in an attempt to appeal to a wider audience, such as financial advisers.