Interactive Investor

Baillie Gifford cuts fees on global income funds

22nd September 2020 13:38

Hannah Smith from interactive investor

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The asset manager will reduce the annual charges on the B share class of two of its funds.

Baillie Gifford will cut the annual management fees on two of its global income funds from 1 October. The affected funds are the £624 million Baillie Gifford Global Income Growth and the £124 million Baillie Gifford Responsible Global Equity Income fund. Both portfolios will see the fees on their B share class cut from 0.57% to 0.5%. 

The move follows a fee reduction on the £719 million Scottish American Investment Company (LSE:SAIN), which saw its fee cut from 0.45% to 0.35% on assets above £500 million.   

In a recently published Value Assessment Report, Baillie Gifford said that its fund range is ranked in the lowest quartile for costs compared to its peer group competitors.

The Scottish asset manager has trimmed fees across one or more of its range of funds and investment trusts 12 times since 2013, most recently with fee reductions on Edinburgh Worldwide (LSE:EWI), Pacific Horizon (LSE:PHI), The Baillie Gifford Japan Trust (LSE:BGFD) and Baillie Gifford Shin Nippon (LSE:BGS) in 2019.

“This latest fee reduction is part of our ongoing commitment to offer value for money to investors,” says James Budden, the group’s director of marketing and distribution.

“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.”

Pressure on fees has been prevalent across the asset management industry in recent years, owing in part to competition from low-cost passive funds. Performance fees are being ditched, while tiered fees have been widely introduced on investment trusts, and open-ended funds have been cutting management charges. 

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