There’s been further moves in the passives industry to lower costs this week, with BlackRock bringing down the fees on some its biggest index trackers and Vanguard removing the pre-set dilution levy from its LifeStrategy range.
But lots more has happened too, with Jupiter revealing its plans for two new income funds and St James's Place announcing a new acquisition. To save you from looking over a week of news, we’ve rounded up some of the biggest stories below.
St James's Place buys Rowan Dartington
St. James's Place (SJP) has announced a deal to buy discretionary investment manager and stockbroker Rowan Dartington Holdings for up to £34m.
An announcement to the London Stock Exchange earlier this week said the acquisition will be made for an initial £19m, with a further maximum potential future consideration of £15.2m. The deal is being financed by a new £250m credit facility SJP has agreed with a number of banks.
SJP chief executive David Bellamy said: “We're pleased to announce that we have entered into an agreement to acquire Rowan Dartington Holdings Ltd, a specialist stockbroking and discretionary investment service.”
“The supplementary services, which include advisory portfolio management, direct equity, trust and charity portfolio management, will broaden the range of investment options we can offer to existing clients and enable us to access new clients who value such services.”
Bristol-based Rowan Dartington was established in 1990 and has in excess of £1.1bn funds under management. Chair Graham Coxell added the deal will enable the firm “to continue to develop and support the propositions and services to our existing and new private clients, as well as the broader UK financial adviser market”.
The deal is subject to regulatory approval.
Vanguard removes dilution levy from LifeStrategy range
A pre-set dilution levy has been taken off the five funds in the Vanguard LifeStrategy range after assets passed the £2bn mark.
Vanguard launched the range, which a fund of funds line investing in Vanguard trackers and targeting different levels of potential risk and return, in June 2011. Investors have been charged an upfront 0.10 per cent levy when buying units in the funds, but this will now be removed.
Nick Blake, head of UK retail at Vanguard Asset Management, said: “As our funds grow in size and we broaden our presence in the UK, we will continue to leverage operating efficiencies and use our increasing scale to lower costs for investors.”
“Vanguard’s LifeStrategy funds address the growing need from investors for low-cost, diversified fund solutions. The fund range combines investment best practices such as strategic asset allocation, broad diversification and automatic rebalancing.”
The funds’ ongoing charges figures will remain at 0.24 per cent.
Since launch, the Vanguard LifeStrategy 100% Equity fund – which is the highest risk offering in the range – has posted a total return of 44.51 per cent, placing it second quartile in the IA Global sector where the average gain has been 36.06 per cent.
Performance of fund vs sector since launch
Source: FE Analytics
Jupiter lines up two income funds
Jupiter Asset Management plans to launch two new income funds before the end of the year, subject to approval from the Financial Conduct Authority.
The group will unveil an Asian income fund for Jason Pidcock, who joins Jupiter from Newton in November. The new fund will follow a similar approach to the £4.4bn Newton Asian Income fund that established Pidcock’s track record in the space.
Meanwhile, the firm plans to launch a multi-asset Enhanced Income fund for Alastair Gunn and Rhys Petheram. This will be an extension of their existing Jupiter Distribution fund, but will have greater flexibility to move between asset classes in pursuit of a higher yield.
Jupiter chief executive Maarten Slendebroek said: “These are important steps along the journey of transforming our product range from one primarily designed around our UK client base to one that offers a variety of attractive options to our increasingly international distribution partners.”
Performance of fund vs sector over 5yrs
Source: FE Analytics
BlackRock slashes fees on five equity trackers
BlackRock has cut the fees on some of its biggest index tracking funds, bringing them down to some of the lowest levels in the industry.
The group will lower the ongoing charges figure (OCF) on its BlackRock 100 UK Equity Tracker and BlackRock UK Equity Tracker to 0.07 per cent on 11 August, down from its current 0.16 per cent. Only Legal & General’s UK Index and UK 100 Index funds are cheaper, as they can be bought for 0.06 per cent on certain platforms.
Meanwhile, the OCFs of the BlackRock US Equity Tracker and BlackRock North American Tracker funds will be reduced from 0.16 per cent to 0.08 per cent while charges on the BlackRock Continental European Equity Tracker will fall from 0.17 per cent to 0.10 per cent.
Tony Stenning, head of UK retail, said: "Through our scale, we are pleased to be able to offer investors five key index equity exposures at a competitive price. We know that UK wealth managers are increasingly combining both index and active strategies alongside each other in their clients' portfolios and we see this trend continuing to grow."
FE Alpha Manager Price handed Fidelity Japanese Values
Nicholas Price is to become the manager of the Fidelity Japanese Values investment trust after current manager Shinji Higaki will stand down after eight years at the helm.
The FE Alpha Manager will assume full responsibility for the portfolio on 1 September, allowing enough time for a smooth transition from Higaki.
Price has more than 20 years’ investment experience in the Japanese equity market, having joined Fidelity’s Tokyo office in 1993 as a research analyst before becoming a portfolio manager in 1999. He currently manages a number of Fidelity’s Japanese funds, including Fidelity Japan Aggressive.
Performance of fund vs sector and index since launch
Source: FE Analytics
David Robins, chairman of Fidelity Japanese Values, said: “Considering the coordinated pro-growth policies and the fundamental changes in corporate behaviour that are occurring, the outlook for Japanese equities is attractive.”
“The board believes Nicholas’ investment approach, combined with his consistent bias towards mid and small-cap growth stocks, is an ideal fit for the company. The board would like to thank Shinji for his diligent management of the portfolio over the past eight years.”
