Franklin Templeton reduces fees on three UK equity funds

US-based asset manager Franklin Templeton Investments has reduced its annual management charge (AMC) on three of its top UK equity funds.

The firm made no mention of last Friday’s referendum result, which saw the UK vote to leave the EU, as a reason for the move. Instead the firm issued a statement explaining that it wants to make actively managed funds more accessible for UK investors.

The reduced AMC will apply to its UK Rising Dividends Fund, UK Equity Income Fund and UK Opportunities Fund for the W share class, bringing the cost down from 75 basis points to 45 basis points.

These funds have performed well, even over the short term with both the UK Rising Dividends Fund and UK Opportunities Fund in the top quartile over one year to May 31, 2016, whilst the UK Equity Income Fund is in the second quartile over the same period.

In its statement about the fund, Franklin Templeton quoted investors talking favourably about the more. Jefferson Fawcett, chief investment officer of Casterbridge Wealth, said the reduction in AMC on the equity funds presents an even more compelling proposition.

He added that Colin Morton, manager of the rising dividends fund, has returned well over 500% since he took over the fund in 1995, compared to its benchmark’s total return of 361.6% over the same period to May 31, 2016. 

Another investor in Franklin Templeton, Peter Toogood, investment director at City Financial, was also quoted praising Morton’s record.

“We believe that the rising dividend concept will flourish in the post baby-boomer world, and that the Franklin UK equity team, led by Colin Morton, is uniquely placed to manage the sensitive balance between generating a long-term growth in the yield on the fund while not overpaying for that growth,” he said.

Franklin Templeton had assets under management of $747.1 billion (€674 billion), at April 30, 2016.

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