FeesJan 5 2017

Baillie Gifford slashes American fund fees

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by
Baillie Gifford slashes American fund fees

Baillie Gifford has cut the fees on its £502m American fund in a bid to boost the portfolio's chances of outperforming the notoriously competitive US market.

The reduction, which took place at the start of this year, brings the annual management fee for the B share class from 0.65 per cent to 0.5 per cent.

This brings the ongoing charges figure (OCF) down from 0.67 per cent to 0.52 per cent.

While the vehicle has performed well in recent years, James Budden, director of retail marketing and distribution at the fund house, said the changes would make it competitive in an environment seen to be difficult for active managers.

“We want our American Fund to be as competitive as possible," he said. 

"Received wisdom has it that active management doesn’t work in the US market given its supposed efficiency.

"We happen to believe that the opposite can be true, and by cutting our fee on this fund we are giving ourselves and its investors a greater chance of beating the index over the long term.”

The fund, which is run by co-managers Gary Robinson, Helen Xiong and Tom Slater, has performed well on a three-year basis according to FE Analytics, returning 72.3 per cent compared with 65.8 per cent from the S&P 500.

The fund also outperformed its peer group, IA North America, which delivered 59.9 per cent over three years.