Investment trust providers are coming under pressure to reduce annual management charges after being undercut in certain sectors of the market by OEICs and unit trusts.
The introduction of ‘clean’ share classes, which have already been launched by the majority of fund management houses to meet requirements for the retail distribution review (RDR), has lowered the direct fees charged to retail clients on a number of open-ended vehicles. The vast majority of fund management groups have priced the average open-ended fund at 0.75% for the RDR-friendly share class, which has led to a number of the vehicles becoming cheaper propositions than investment trusts. According to broker Winterflood, investment trust providers such as Baillie Gifford, BlackRock, J...
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