Investments 

Lindsell Train cuts UK Equity fees as assets top £3bn

Lindsell Train cuts UK Equity fees as assets top £3bn

Lindsell Train is to cut the fees on its UK Equity fund in a bid to ensure some economies of scale are passed on to investors as the portfolio passes £3bn in assets.

Manager Nick Train (pictured) said the firm was seeking to “accelerate” a lowering of the fund’s ongoing charges figure (OCF) by cutting its own management fee from 0.65 per cent to 0.6 per cent on assets above the £3bn mark.

The fund’s administrator has also begun cutting the fees it charges at higher asset sizes, Mr Train added. 

UK Equity’s OCF has already fallen in advance of these changes, dropping from 0.75 per cent to 0.72 per cent in the past year.

“We have always aspired to charge management fees that our investors would consider fair, as well as seeking to keep additional costs in check,” the manager said.

“If fund assets continue to grow, the effect for shareholders will be more meaningful and, combined with other decreasing costs, will lead to a continuing reduction in the OCF.”

A number of high-profile investment trusts, including Scottish Mortgage and Mr Train’s own Finsbury Growth & Income vehicle, have introduced tiered fees over the past 12 months, but the practice remains rare among open-ended funds. 

The FCA said in its interim market study report last November that asset managers should do more to pass on economies of scale to investors.

Comments