The £188m Schroders Income Growth trust has ditched its flat fee and returned to a tiered structure, but at a reduced level.
The trust, which is managed by Sue Noffke, previously charged a flat fee of 0.75 per cent on the value of its assets under management net of current liabilities other than short term borrowings, less any cash up to the level of borrowings.
But from 1 September 2018 it has charged a fee at a rate of 0.65 per cent a year on the first £200m and 0.55 per cent a year on subsequent amounts.
The trust's board said had the new fee arrangements been applied to the trust's year-end chargeable assets, the management fee payable would have reduced by 15 per cent.
This is the second time in four years the trust has changed its fee structure after it removed its performance fee in 2014.
Before 2014 the trust was entitled to a fee of 10 per cent of the net revenue return for the year after tax, plus a fee of 0.375 per cent on assets up to and including £75m, 0.35 per cent on the next £50m and 0.325 per cent on anything above £125m.
In addition to this old tiered charging structure, the trust was also entitled to a performance fee measured as 5 per cent of any outperformance above the FTSE All-Share.
Over the past three years the trust has slightly underperformed its benchmark, returning 17.7 per cent compared to the 18.7 per cent returned by the UK Equity Income sector.