Baillie Gifford shifts Monks trust to tiered fee structure

Baillie Gifford shifts Monks trust to tiered fee structure

Baillie Gifford is to move the £1.5bn Monks Investment Trust to a tiered fee structure continuing its trend of reducing charges as its vehicles grow in size.

From May 1, the global equity trust managed by Charles Plowden, will shift to a tiered fee structure with an annual management fee of 0.45 per cent on the first £750m assets, reduced to 0.33 per cent on assets over that amount.

This will replace the previous annual management charge, which was 0.45 per cent regardless of assets in the trust.

The firm said that based on its calculations and a trust size of £1.33bn - its assets under management on December 31 2016 - the ongoing changes figure would reduce by 0.04 per cent, or £500,000.

Baillie Gifford has a history of passing on the benefits of scale to the investors in its investment trusts by lowering fees or introducing tiered fee structures.

Earlier this month, the firm introduced a tiered fee structure to its flagship £5.1bn Scottish Mortgage Investment Trust, managed by James Anderson and Tom Slater, as it was admitted into the FTSE 100.

The new structure retains the previous 0.3 per cent annual management charge for assets up to £4bn, but that fee drops to 0.25 per cent for the assets above that threshold.

The change to Scottish Mortgage followed similar changes to the fees on Baillie Gifford’s £573m Japan Trust and £328.6m Edinburgh Worldwide Investment Trust.

Other large trusts have taken a similar approach, such as the Finsbury Growth & Income Trust, managed by Nick Train, which recently introduced a tier fee structure as it passed the £1bn threshold.