Baillie GiffordSep 22 2020

Baillie Gifford makes further fee cuts

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Baillie Gifford makes further fee cuts
ByImogen Tew

Giant fund house Baillie Gifford is to cut the management fee on its top performing global income funds as part of an “ongoing commitment to offer value for money to investors”.

The asset manager announced today (September 22) that investors in the £624m Baillie Gifford Income Growth and the £124m Baillie Gifford Responsible Global Equity Income funds would see their fees cut from 0.57 per cent to 0.5 per cent from October 1.

It follows a recent fee reduction for the £719m Scottish American Investment Company — managed by the same team — from 45 bps to 35 bps on assets above £500m. 

James Budden, director of marketing and distribution at Baillie Gifford, said: “This latest fee reduction is part of our ongoing commitment to offer value for money to investors. 

“We are keen to make our equity income funds as competitive as possible in the prevailing environment. 

“They offer a global approach, resilience of yield and income from growth companies with the potential to increase their dividend streams in the long term. This mix contrasts with a great many alternatives currently available to investors.”

The Baillie Gifford Income Growth fund is among the top performers in the IA Global Equity Income sector, returning 34 per cent over the past three years compared with its peers’ average return of 11 per cent.

It is the absolute top performer in the 41-strong sector over the past five years.

Meanwhile, the Responsible Global Equity Income fund, which launched in December 2018, has returned 12 per cent in the past 12 months while its peers lost 3 per cent.

Baillie Gifford has reduced fees across its funds and trusts 12 times since 2013, having recently cut the costs for its Edinburgh Worldwide Investment Trust, Pacific Horizon Investment Trust, The Baillie Gifford Japan Trust and Baillie Gifford Shin Nippon.

In its debut assessment of value report in July, Baillie Gifford announced it had shut its two active gilt funds after it discovered the portfolios were not providing value to investors.

The Active Gilt Investment and Active Long Gilt Investment funds had underperformed their respective indices and targets over the past three years.

Baillie Gifford found a further five of its 37-strong fund range required either further action or extended monitoring in order to ensure they provided value, but the fund house maintained that 95 per cent of its fund range was ranked in the lowest quartile for costs when compared with the peer group.

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