Thesis Asset Management has switched some of its unit trusts for stocks, as the discretionary manager looks to slash costs for clients.
The firm’s Optima fund range now has direct exposure to UK stocks, which will replace nearly all the holdings in UK equity unit trusts.
The move means the ongoing charge for all share classes has fallen, with the cheapest falling to 1.04 per cent from 1.34 per cent.
Gaurav Gupta, model portfolio manager at Thesis, said: “The industry as a whole is facing pressure on cost and it needs to demonstrate that it provides value for money.”
“We want to maintain diversification in our clients’ portfolios and give them the benefit of lower fees at the same time.”
It is good to see a firm look at ways to reduce costs for clients without automatically heading for passive exposure Alex ReynoldsMr Gupta said Thesis was confident about bringing down the charge of the Optima funds without compromising performance, pointing to the firm’s track record when investing directly in UK equities for some of its model portfolios.
He also said the change has been welcomed by financial advisers and existing clients, which he said highlights the demand for cost-saving initiatives.
“Our clients are conscious of the need for suitable portfolios at the right price and we believe this change helps them achieve exactly that.”
Alex Reynolds, IFA at London-based Advies Private Clients, said he thought this was an interesting move, but that it would be interesting to know what Thesis expects the cost of trading to be.
"These trading costs are not factored into the ongoing charge," he said, adding a lot will depend on how actively managed the funds are.
"The other consideration is how they will perform, and I would certainly wait and see how the strategy works before considering it for any of my clients.
"But it is good to see a firm look at ways to reduce costs for clients without automatically heading for passive exposure."
katherine.denham@ft.com
