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Gartmore ties focus fee to performance

Gartmore is to pioneer a new performance-related charging structure on its range of focus funds, as exclusively revealed on Money Marketing Online last week.

The five focus funds – American, European, glo bal, Japan and UK – will have a standard annual fee of 1.5 per cent, increasing to 2 per cent after January 31, 2002.

If any of the funds fall out of the top quartile of their sector for the previous 12 months at the end of each month, the annual fee will be reduced to 1.25 per cent for that month.

The funds will have an initial charge of 5.25 per cent, discounted to 3.5 per cent until April 30. Initial commission is 3 per cent, with 0.5 per cent trail.

The funds set for launch on January 31, will be the first unit trusts to develop a performance related charging structure. Each will hold a concentrated portfolio of around 30 stocks, and will aim to produce high growth in return for higher risk and price volatility.

Gartmore head of retail Michael Wrobel says: “The point of these charges is that they align our interests even more with those of the customer.”

Simpsons partner Neil Thomas says: “What worries me is the manager is being rewarded for comparative performance. If the entire sector is down and the client is losing money, the extra fee compounds the pain.”


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