Fixed income specialist fund house Kames Capital has cut the fees on all of its bond funds in an effort to remain "competitive".
The fee cuts will take effect from January 1 and will be up to 25 basis points of the annual management and ongoing charges figures.
A representative of the company said: “Kames has taken this decision as part of a thorough, business-wide review of our products, services and fund range to ensure we continue to be competitive and provide our investors with value for money.
"The changes will benefit nine funds in total, five UK and four Dublin-domiciled. The move, which applies to new and existing investors, follows the repricing of the Kames Absolute Return Bond fund in April this year which saw the ‘B’ share class fee cut by 35 bps to 0.30 per cent from 0.65 per cent.”
The fixed income franchise at Kames Capital has suffered a string of high profile manager exits in the past two years, with the departure of fixed income heads Phil Milburn and David Roberts in 2017, and that of their replacements at the end of 2018.
Mr Snowden and his team recently launched a pair of fixed income funds at Artemis, with the Artemis Corporate Bond fund having an ongoing charge of 0.40 per cent, which is a lower cost than all of the old charges in the Kames fund range and lower than the new charges in all but one instance, the Kames Sterling Corporate Bond (see table below).
The Artemis Corporate Bond fund, which is run by Mr Snowden, raised £82m from investors before it had even formally launched.
Ben Yearsley, who jointly runs consultancy firm Fairview Investing, said the fee cut was a sign of the direction of travel for the bond market generally, with a range of providers now charging 0.50 per cent or lower for a standard bond fund, and some, including Merian Global Investors, charging less than 0.40 per cent.
The full range of fee reductions are below:
UK-domiciled funds
'B’ share class | Current fee Fund AMC% | New fee Fund AMC % | Current fee OCF % | New fee OCF %* |
Kames Sterling Corporate Bond | 0.50 | 0.35 | 0.54 | 0.39 |
Kames Ethical Corporate Bond | 0.50 | 0.45 | 0.54 | 0.49 |
Kames Investment Grade Bond | 0.75 | 0.50 | 0.77 | 0.52 |
Kames High Yield Bond | 0.75 | 0.55 | 0.79 | 0.59 |
Kames Strategic Bond | 0.75 | 0.55 | 0.80 | 0.60 |
Dublin-domiciled funds
'B’ share class | Current fee Fund AMC% | New fee Fund AMC % | Current fee OCF % | New fee OCF %* |
Kames Investment Grade Global Bond | 0.65 | 0.35 | 0.70 | 0.40 |
Kames Short Dated High Yield Global Bond | 0.50 | 0.40 | 0.60 | 0.50 |
Kames Strategic Global Bond | 0.65 | 0.55 | 0.70 | 0.60 |
Kames High Yield Global Bond | 0.65 | 0.55 | 0.79 | 0.69 |
*Estimated ongoing charge based on adjusted management charges and actual expenses for the year ending 30/09/2019.
david.thorpe@ft.com
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