Fees  

Baillie Gifford in fresh round of fund fee cuts

Baillie Gifford in fresh round of fund fee cuts

Fund house Baillie Gifford is to undertake a fresh round of cuts in fund fees as the active equity house continues its battle against the rise of passive, with charges due to fall on 20 open-ended products from October 1.

The asset manager said it would reduce fees on 14 onshore and six Dublin-domiciled products as part of "a continued strategy of offering active management to investors at an attractive price whenever fund scale and ongoing costs allow". The reductions range from three to 10 basis points.

The fund group has form on reducing fees to aid its products in challenging demand for passive strategies, generally as funds have grown in size. It implemented fee cuts on both investment trusts and open-ended vehicles recently to reflect this. The latest move is one of the larger scale price reductions by Baillie Gifford or its peers in terms of both assets under management and fund numbers.

Earlier this year, the firm lowered fees on its American fund in a bid to make it more competitive while investors in some of the firm's flagship investment trusts have also seen charges come down this year.

Baillie Gifford's latest exercise covers active equity funds across the spectrum in both emerging and developed markets, including its £3.1bn Long-term Global Growth Investment fund, its £1.9bn Japanese fund, and its recently launched Positive Change fund. Overall, the 14 onshore funds seeing price cuts have close to £10bn in assets.

Andrew Telfer, joint senior partner at the firm, said: "Investors should be able to choose between passive and attractively priced active funds alongside considering the quality and future capability of active funds to deliver after-fees outperformance.

"Sharing economies of scale with investors as funds grow is one way in which Baillie Gifford looks to deliver ongoing value for clients."

Funds seeing cuts to charges:

Oeic funds

Ongoing charges before fee reduction (%)

Ongoing charges* after fee reduction (%)

Developed Asia Pacific Fund

0.69

0.59

Emerging Markets Growth Fund

0.83

0.80

Emerging Markets Leading Companies Fund

0.82

0.79

European Fund

0.70

0.60

Global Alpha Growth Fund

0.68

0.60

Global Income Growth Fund

0.68

0.60

Global Select Fund

0.58

0.53

Greater China Fund

0.85

0.82

International Fund

0.68

0.60

Japanese Fund

0.68

0.63

Japanese Income Growth Fund

0.68

0.63

Long Term Global Growth Investment Fund

0.74

0.66

Positive Change Fund

0.65

0.60

UK Equity Alpha Fund

0.68

0.58