The key investor document (Kid) information for the £472m JP Morgan Claverhouse investment trust should not be relied upon, according to its board.
As FTAdviser has previously reported, under the Europe-wide Packaged Retail Insurance and Investment Product (PRIIP) rules, investment trusts must include information about the future level of performance and risk from their fund.
There has been widespread industry concern that these measures, which are prescribed by the regulator, may mislead investors.
Simon Fraser, who chairs the £3.9bn Foreign and Colonial investment trust said the Kid document requirements could lead to a “future mis-selling scandal".
Andrew Sutch, chair of the Claverhouse trust, has sought to head off the risks of any such future action by writing in the report of the trust that: “The Kid must be made available by the investment managers to retail investors prior to them making any investment decision and it is also available on the company's website.
"However, the company is not responsible for the information contained in the Kid and investors should note that the procedures for calculating the risks, costs and potential returns are prescribed by the law.
"The figures in the Kid may not reflect the expected returns for the company and anticipated performance returns cannot be guaranteed.”
The Financial Conduct Authority (FCA) has stated firms can include additional information in the Kid to clarify performance and risk information.
Separately the board of the £1.5bn City of London investment trust has told its investors to treat the Kid information with “caution.”
Ian Sayers, chief executive of trade body Association of Investment Companies (AIC) said the risk measures, which are designed by the regulator, not the firms themselves, could mislead clients.
He said he must be the only head of a trade body anywhere to have his members trying to emphasise that their products are more risky, and the returns less certain, than the regulator states.
In its results statement, the JP Morgan Claverhouse trust announced an increased dividend for the 35th year in a row.
The trust manager, William Meadon, said he has been buying more technology shares for the trust this year.
Meanwhile, JP Morgan Asset Management has announced a cut to the fees on its range of open-ended funds.
The company said the charges on most share classes of its open-ended fund range would fall as a result of the expenses falling from 0.18 to 0.15 per cent. There is an annual management charge on top of this. That number doesn’t change, but means the total cost of ownership on a JP Morgan open-ended fund falls by, in this case, 0.03 per cent.
A JP Morgan Asset Management spokesman said: “J.P. Morgan Asset Management has switched from a model of fixed operating expenses to a capped model in which operating expenses are variable. The changes, applied to all UK OEIC funds, were effective 1 February 2018. Variable operating expenses will provide shareholders with economies of scale as funds grow in size. In addition, capped expenses provides certainty of maximum operating expenses both for new funds or if assets decline. All other fees and expenses remain the same.”
David.Thorpe@ft.com
