Neptune cuts Global Income fees to 0.25%

Neptune cuts Global Income fees to 0.25%

Neptune Investment Management has slashed the ongoing charges figure (OCF) on George Boyd-Bowman’s Global Income fund in a bid to attract investment.

The fund manager has capped the OCF for the £2.5m fund’s F share class at 0.25 per cent for the next two years.

The change, effective immediately, represents a reduction of 86 basis points from the current 1.11 per cent OCF offered by the standard retail C share class.

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Neptune said the lower charge will apply until January 1 2018. At that point, the fund’s annual management charge (AMC) will rise to 0.65 per cent – still lower than the current C share class AMC of 0.75 per cent – and the OCF will no longer be capped.

The F share class will only be available via platforms that provide Neptune with sufficient information to show that investors are fully aware of the price rise in 2018.

Neptune’s head of distribution, Charlie Parker, said he hoped investors would consider the new terms alongside the fund’s investment case.

“We recognise the price of an investment is a variable investors should consider during proper due diligence of an investment product.

“The fund’s manager… represents one of our brightest talents here at Neptune and this fund can offer some of the most meaningful diversification in its sector to our investors.”

Mr Boyd-Bowman joined Neptune as a graduate in 2010 and has run the fund since its inception in December 2012.

Now approaching his three-year anniversary in charge of the portfolio, the manager currently holds 32.6 per cent in North American equities, 24 per cent in both Europe and Japan, and 10 per cent in the UK, according to data from FE Analytics.

Since launch the fund has returned 28.3 per cent compared with an IA Global Equity Income sector average of 26.6 per cent, according to data from FE Analytics. In the past year, the fund returned 8.9 per cent compared to a sector average of 5.3 per cent.

The use of OCF discounts for a limited period is still relatively rare in the fund management industry, but examples have begun to surface in recent years.

Guinness Asset Management offered its Global Equity Income fund at an AMC of 0.25 per cent and a total expense ratio of 0.74 per cent between 2012 and April 2015 in a bid to boost assets.

Meanwhile, earlier this year Montanaro Asset Management said it would scrap the AMC on its Equity Income fund until it reached £100m in size, although the fund continued to charge an OCF of around 0.1 per cent.