Investments  

Baillie Gifford cuts fees on Japan and Worldwide trusts

Baillie Gifford cuts fees on Japan and Worldwide trusts

The boards of the £422m Baillie Gifford Japan Trust and the £272m Edinburgh Worldwide Investment Trust have agreed to reduce the management fees on both trusts by adding a new layer to the tiered fee structure which is based on net assets.

From today (September 1), the trusts will continue to be charged an annual management fee of 0.95 per cent on the first £50m of net assets and 0.65 per cent on net assets above £50m, with an additional tier of 0.55 per cent introduced on net assets above £250m, with fees calculated and levied at each quarter end.

James Budden, director of retail marketing and distribution at Baillie Gifford, said: “The investment trust industry has to take the initiative if it wants to compete in the new world of transparency and clarity of costs for investors. There is an opportunity for the boards of trusts and managers to work together to grow assets under management and drive down fees for the end investor.”

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He added: “This move highlights our ongoing commitment to the long-term future of the investment trusts we manage. We already have one of the most attractive fee levels for Scottish Mortgage Investment Trust, the £4bn global investment trust, and by taking advantage of economies of scale there is an attractive opportunity to reduce costs and remain competitive.”

Previously, annual management charges for the Baillie Gifford Japan Trust and Edinburgh Worldwide Investment Trust were calculated at 0.95 per cent on the first £50m of net assets and 0.65 per cent on the remainder.

Baillie Gifford is the latest manager to respond to the growing pressure on actively managed open-ended and closed-ended funds to lower their fees as low cost passive strategies become increasingly popular.