We are seeing an alarming trend of changing/lowering fee structures within Platinum Asset Management Limited (PTM) and now today K2 Asset Management Holdings Ltd (KAM). I think that this will continue in the industry as Managed Funds continue to fight against lower cost options e.g. ETF’s for investors. While reducing both management fees and performance fees is good for clients it is not good for the business. Keep a close eye on Magellan (MFG) and BT Investment Management Limited (BTT) or other listed fund providers for changes to their fee structures in the future.
Adam Dawes is a Senior Investment Adviser and has worked at Shaw and Partners since 2003. Adam manages his clients’ affairs with complete professionalism and dedication, achieving the best possible financial outcomes to meet clients’ goals. In...
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I'm wondering if fees are being reduced because investors are waking up to the fact that many managers' after fees performance have not been able to outperform benchmarks. I have money with a fund of one of the mentioned fee reducing managers. I initially was fooled by the at first glance impressive looking arithmetic scaled comparison graph. However after close examination, one finds that the fund has been line ball with its MSCI benchmark for the past 6 years. All the outperformance has been channelled to the manager via the 2.05% pa investment manager fee, 0.06% pa responsible entity (also the manger) fee, 0.3527% pa expense recovery fee and a 20.5% performance fee with no hurdle.
Hi Graeme, I agree people are now looking for more out their investments. ETF's is one example of low cost efficient market vehicles. Thanks for the message.