First State Investments is implementing a new fee charging structure to its Global Opportunities fun...
First State Investments is implementing a new fee charging structure to its Global Opportunities fund which could see investors pay no AMC if the fund performs badly.
The fee-adjusted product will lower its annual management charge based on the fund's performance, but investors pay no annual management charge should the fund fall into fourth quartile performance.
The AMC will be set at 1.00% but adjusts down in three transparent steps, dependent on the First State Global Opportunities Fund's quartile performance each month, as analysed by Lipper Hindsight.
If the fund achieves top quartile performance, the AMC will stay at 1%, if it is recorded to be 2nd quartile, the AMC is cut by 25% to 0.75%.
Should the fund fall into third quartile performance for any month, the AMC will be cut again to 0.4%, down to 0% AMC if it hits 4th quartile.
Changes are also being made to the way from August 2002 to the way in which the fee is taken each month so charges are transparent, rather than using a complex system of rebates.
The new fee structure will be used on First State's third party life and pension wrappers, which will be unveiled at a later date.
Phil Jefferson, head of retail sales says: "The First State Fee Adjusted Product is the only product that is structured to ensure the Fund Manager puts performance first; by doing so, we are aligning our interests with those of our clients. This is a clear cut, simple investment product and a further step
towards greater transparency for investors".
Putting the tech into protection
Square Mile’s series of informal interviews
Fallout from Haywood suspension
Launching later in 2019
£80bn funds under calculation