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TCF Investment defends tracker costs of up to 3.79%

TCF Investment chief executive David Norman, an avid campaigner on transparency in fund management charges, has been forced to defend the charges on its tracker funds which are quoted at up to 3.79 per cent.

There are four tracker funds in the Total Clarity Fund range, which launched in October 2010 and have combined assets under management of £10m.

Fund factsheets quote ongoing charges of 3.79 per cent for the Total Clarity Defensive fund, ongoing charges of 2.87 per cent the Total Clarity Diversified fund, ongoing charges of 2.63 per cent for the Total Clarity Cautious Growth fund and ongoing charges of 1.86 per cent for the Total Clarity Diversified Balanced fund.

TCF Investment chief executive David Norman says the total expense ratio is actually 0.8 per cent but that the fund information reflects historical charges due to a change of authorised corporate director and associated administration costs.

Norman says: “We have to work within a regulatory framework that requires us to show historic total expense ratios which may be out of date. In terms of treating customers fairly, this is probably slightly misleading but there has been no sleight of hand.”

Verbatim Asset Management bought the rights to the funds in June.

IFA Three Counties head of investments and product strategy Andrew Alexander says: “If this was active management, all hell would be breaking loose. For them to bang on about clarity is a disgrace.”

Chase de Vere head of communications Patrick Connolly says: “0.8 per cent is still high for a passive. You should be looking at a maximum of 0.5 per cent but more realistically closer to 0.2 or 0.3 per cent.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. This appears to be very low quality journalism.

    As I shareholder in these funds, I would like to know why Money Marketing is making a story out of figures which will be long known to the shareholders and which are now historic (back to a time when certain fixed costs were charged to the funds when they were small and additional restructuring costs were charged by the previous Authorised Corporate Director) and which in no way reflects the reality of the current situation for investors.

    A quick visit to the Verbatim website would have revealed they have made it clear in their communications from when they took these funds on that investors can expect TERs of 0.8% (i.e. from 1 June 2013). Why is this not reported?

    What is Money Marketing’s justification for publishing this kind of non-story, which is, in effect, misleading.

    And anyway, these are not simple tracker funds: for a risk managed, multi-asset, predominantly passive solution, which these funds are, a TER of 0.80% is not out-of-line and compares very favourably with active alternatives.

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