Franklin Templeton funds add £100m on slashed fees

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Franklin Templeton has seen months of outflows turn into almost £100m of inflows over three months after it slashed its annual management charges from 0.75 per cent to 0.45 per cent on three funds.

Since July, when the fees were cut, the UK Equity Income, UK Rising Dividends and UK Opportunities funds have consistently seen inflows, Morningstar data reveals.

The net flows have totalled £99.1m, with the UK Equity Income fund alone attracting £59.2m in July, the month the new fees came into effect.

The funds had seen near consistent outflows for the previous nine months totalling £15.9m.

Fund manager Colin Morton says the rationale behind slashing the fees is to grow assets and other funds that have capacity constraints have not seen their fees reduced.

The team’s mid-cap fund for example is currently one of the largest in the sector with £1bn assets under management and retains the 0.75 per cent annual management charge, which Morton says is closer to market rates.

“Early signs have been encouraging, but we’ll have to look back in a couple of years time and hopefully see that the asset growth has more than outstripped the reduction in the fee,”

Morton adds that the lower fee stops a lot of back and forth with clients who try and negotiate fees downwards.

“It just makes it so much simpler when people don’t have to worry about whether the fees are competitive or not and want to have another conversation about the fee.”