FeesJul 27 2017

Goldman cuts EM fund fees as assets rise

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Goldman cuts EM fund fees as assets rise

Goldman Sachs Asset Management (GSAM) is to cut the fee on its Emerging Markets Core Equity fund after assets more than doubled this year.

The firm's $939m (£719m) Luxembourg-domiciled fund will see its annual management charge fall from 1.75 per cent to 1.35 per cent on August 8. GSAM said the move came after the fund's assets under management rose by more than 75 per cent in the first half of 2017.

A spokesperson said: "The fund has attracted interest from investors for its ability to make use of information that traditional investment methods may not be able to process."

It uses an alternative strategy to traditional stockpicking, using technology and "investor insight" to analyse data, which then informs stock selection. The firm's Core brand refers to its products which increasingly use 'big data' to forecast companies' future earnings.

The move to share the benefits of rising assets with investors also comes at a time of increased regulatory scrutiny on the matter. Fund firms were heavily criticised in the FCA's interim report for its asset management market study over not passing on economies of scale.

The GSAM fund has returned 52 per cent over three years versus a 36 per cent average for the IA Global Emerging Market sector. The MSCI Emerging Markets index is up 37 per cent over the same period.