One of the advantages that investment trusts have historically enjoyed over their open-ended peers is lower fees, writes Simon Elliott, head of investment trust research at Winterflood Securities.
Before the Retail Distribution Review (RDR) abolished the practice in 2012, most open-ended funds paid trail commission to intermediaries. This heavier fee load was arguably part of the reason investment trusts have tended to outperform open-ended funds over the long term. However, since RDR there has been a significant repricing of investment management fees for actively managed funds. This segment of the industry has come under growing pressure from passive funds, with beta proving increasingly inexpensive. The Financial Conduct Authority (FCA's) Asset Management Market Study has...
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