'Taking half of a fund's income away in fees makes no sense to me'

PROFILE

Charging performance fees defeats the object of income funds, according to Charles Montanaro, CEO of Montanaro Asset Management, who has moved to scrap all charges on his own income product this year. Hardeep Tawakley reports.

Fund pricing has been a hot topic in the investment management industry this year, as providers strive to compete more effectively in the post-RDR world. As fund houses have begun moving towards ‘clean’ unbundled share classes, performance fees have also come under the spotlight.  One industry figure who is critical of performance fees is Charles Montanaro, CEO of Montanaro Asset Management and manager of its Equity Income fund. “I do not believe you should charge performance fees on an income fund, because people want them in order to live off the income. That is predominantly why...