Baillie Gifford slashes active management fees

Fees_calculatingEdinburgh-based investment manager Baillie Gifford has cut investment management fees by as much as 10 basis points across a range of funds.

Effective from October 1, 2017, the fee for the Baillie Gifford European Fund is to be cut by a percentage point from 0.65% to 0.55%, and the Baillie Gifford Japanese Fund fee is to reduce from 0.65% to 0.60%.

The fee cuts apply to the firm’s UK Oeics and Irish Ucits funds and follow an earlier cut, in January 2017, when the annual management fee for the Baillie Gifford American Fund fell from 0.65% to 0.50%.

Baillie Gifford has previously adopted a tiered approach to fees across its range of investment trusts and announced fee reductions for Scottish Mortgage Investment Trust and Monks Investment Trust earlier this year.

Andrew Telfer, joint senior partner at Baillie Gifford, said: “Active managers should take the initiative in today’s environment. Value for money is an often-neglected element of the fund buying process.

“Investors should be able to choose between passive and attractively priced active funds alongside considering the quality and future capability of active funds to deliver after-fees outperformance.”

In response to the news, Jonathan Miller, director of manager research for Morningstar UK, said: “We’re pleased to see a fund group reduce fees across a large part of their range. Baillie Gifford’s announcement affects 20 of their equity funds, with fees falling by as much as 10 basis points.”

He added that Baillie Gifford’ clients, which has included more retail clients in recent years,  will enjoy the firm’s economies of scale, something that “too few houses in the UK do”.

In June the Financial Conduct Authority published its final report into fees in asset management and called for the disclosure of a single all-in fee to investors and standardisation of costs to institutional investors.

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