The FSA Spy market buzz – 22 November 2024
Dimensional excludes the Middle Kingdom; JP Morgan’s optimistic outlook; Household wealth is rocketing; Schroders is thinking about privates; Ninety One’s pithy AI; German woes and much more.
HEAD-TO-HEAD: First State vs Value Partners
FSA compares the First State Asian Equity Plus Fund and the Value Partners High-Dividend Stocks Fund
The First State fund has a 1.58% ongoing charges fee (OCF), which is lower than the category average of 1.94%, according to FE.
The Value Partners has an OCF of 1.46% excluding the performance fee. The manager charges 15% on the excessive returns gained over the financial year of the fund.
According to the fund’s factsheet, the performance fee will only be charged if the fund assets exceed the “high watermark”, which is the all-time, year-end high of the fund.
Based on the “high-on-high” principle, no performance fees will be charged in the subsequent loss year until the loss is fully recovered.
Ng noted that investors should aware of the performance fee, which could erode fund investment returns.
“It is not a common practice for long-only mutual funds but for hedge funds. But at some point, charging a performance fee could align the interests between investors and fund management team as it would give incentive to the manager to perform better.”
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