Headline: “Baillie Gifford cuts fee for top-performing trust”

aroominyork

Baillie Gifford has announced that it is changing the fee on its US Growth trust. Previously, the trust had a management fee of 0.7% on the trust’s first £100 million of net assets. For assets in excess of that, a fee of 0.55% was charged.

It will still charge 0.7% on the first £100 million of net assets. Assets above £100 million but below £1 billion will also still be charged 0.55%. However, assets in excess of £1 billion will now see a reduced management fee of 0.5%.

How much is the trust currently worth? Just a smidgen over £1 billion: £1.05 billion, to be exact. Now, if my maths is right this fee reduction is costing Baillie Gifford £25,000. What a cheap way to get nice publicity. (Cynical, moi?)

csgohan4

US equities are quite priced highly. Difficult to gauge if it will fall down sooner than later. 

MarkCarnage

They cut the fees for Scottish Mortgage quite significantly a year or two back......

Diplodicus

Those boys and girls at Baillie Gifford have done well!

Clever of them to entice investors with the promise of lower fees overall in future but it is the early adopters who have made a killing.

aroominyork

If you run the charts you'll see it was only the first six months of COVID when BG shot out the lights. Over the last year the open ended version of SMT has returned the same as a global index fund but with a huge amount more volatility (FE138 vs. FE75). Charts below for 5 years, 18 months and 12 months.

IvanOpinion

I have been a fan of Baillie Gifford funds ever since I took control of my own finances.  So good to see a charge reduction.

Nice to see proper headline journalism that uses the word 'cut' ... an amateurish journalist wannabe might have used the word 'slash'.

Diplodicus

You're right, they trebled in that time. Tesla holding I presume. But over its short lifetime the performance overall is very good. Shares were 100p at launch (early 2018) now 336p. 

Diplodicus

csgohan4 said:

US equities are quite priced highly. Difficult to gauge if it will fall down sooner than later. 

It's hard/impossible to gauge if you're focussed on funds/indexes rather than its component pieces. But a couple of precepts that have stood me in good stead: When a world crisis looms, money always runs to $. And things generally don't go back to where they were before.