Norwich Union has admitted it cannot sustain investments under the government's proposed price caps ...
Norwich Union has admitted it cannot sustain investments under the government's proposed price caps and will have to increase annual charges on some of its funds from February.
Funds will be divided into two categories from 28th February to give the option of low-cost tracker funds or slightly higher costs on actively managed funds.
Three funds will make up the CAT priced range - the Blue Chip Tracker, UK Index Tracker and International Index Tracker - which carries an annual management charge of 0.9% and no initial fee.
The non-CAT priced range will from February contain eight funds, which carry slightly higher charges and the addition of an initial charge:
|Fund||Current AMC %||New AMC from Feb %||Initial charge %|
|Higher Income Plus||1||1.25||4|
|UK Equity Income||1||1.50||5|
Commenting on changes to the fund structure, Cuimin Macmahon, head of collective investments for Norwich Union, says:
"Norwich Union continues to offer both CAT and non-CAT priced retail funds thereby ensuring clients have the choice of both active or passive management of their funds.
"The current price cap on CAT funds makes it uneconomic for us to continue to offer actively managed ISAs within a 1 per cent charge. We are therefore changing the pricing structure of actively managed funds to better reflect the true cost of selling them and managing them.
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