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ASI cuts fund fees

The reduction in management charges applies to its Asia Pacific Equity Fund.
A view of the architecture of Union Street, Aberdeen Scotland.

Aberdeen Standard Investments (ASI) will slash annual management charges across 11 of its funds from 1 June, reports Harriet Habergham for FSA‘s sister publication, Portfolio Adviser.

In a letter to investors, ASI said it was planning fee cuts across a number of its sterling government bond funds, as well as some of its larger funds, including the £1.1bn ($1.53bn) Emerging Markets Equity and £1.1bn Asia Pacific Equity funds “following a review of the funds’ pricing”.

Shareholders in the ‘A’ or retail class of the Global Equity, Emerging Markets Equity, Global Ethical Equity, Asia Pacific Equity, Asia Pacific and Japan Equity and World Income Equity funds will see fees drop by 0.25% next month from 1.45% to 1.20%.

Retail investors in the Sterling Government Bond, Sterling Inflation-Linked Bond and Sterling Long Dated Government Bond funds will be treated to an annual management charges (AMC) reduction of 0.15%, while those in the UK Government Bond fund will see annual charges drop from 0.90% to 0.70%. The Sterling Short Term Government Bond fund will see the smallest AMC cut of 0.05%.

AMC reductions for retail shareholders

FundAMC until 31 May 2021AMC from 1 June 2021OCF until 31 May 2021OCF from 1 June 2021
ASI Global Equity Fund1.45%1.20%1.57%1.32%
ASI Emerging Markets Equity Fund1.45%1.20%1.64%1.39%
ASI Global Ethical Equity Fund1.45%1.20%1.57%1.32%
ASI Asia Pacific Equity Fund1.45%1.20%1.64%1.39%
ASI Asia Pacific and Japan Equity Fund1.45%1.20%1.59%1.34%
ASI World Income Equity Fund1.45%1.20%1.57%1.32%
ASI Sterling Government Bond Fund0.85%0.70%0.95%0.80%
ASI Sterling Inflation-Linked Bond Fund0.85%0.70%0.95%0.80%
ASI Sterling Long Dated Government Bond Fund0.85%0.70%0.95%0.80%
ASI Sterling Short Term Government Bond0.75%0.70%0.80%0.75%
ASI UK Government Bond Fund0.90%0.70%0.92%0.72%
Source: Aberdeen Standard Investments

A number of fund houses have cut fees recently in a bid to become more competitive. M&G cut fees across 45 of its fund at the beginning of this year following an internal review

The fee cut comes on the back of Standard Life Aberdeen’s announcement of its name change to ‘Abrdn’ as part of its “future-focused growth strategy”.

In an interview with This is Money, SLA chief executive Stephen Bird (pictured) said that the new brand would modernise the company.

He said: “The old traditional asset management industry is in decline. There are too many people living off fees just by sitting on assets. That’s not the future, there has to be change that benefits customers. Better value, performance and service.”

ASI, the asset management arm of SLA, has been forced to shut a number of its funds recently. It announced the closure of its UK Impact-Employment Opportunities Equity fund last week after its biggest backer withdrew their investment. The fund had previously been called out for its exposure to fast fashion retailer Boohoo.

It has also shut its UK Recovery Equity fund and its Global High Yield Bond fund in the past year.

Part of the Mark Allen Group.