Miton removes initial charge on multi asset funds

Spotlight on charges 700x450.jpgMiton has removed the initial charge on two of its flagship multi asset funds in a bid to improve transparency.

Effective today, the funds involved in the change are the £371m CF Miton Cautious Multi Asset fund and the £81m CF Miton Defensive Multi Asset fund, both managed by David Jane and Anthony Rayner.

According to the funds’ fact sheets, the entry charge for the Cautious Multi Asset fund was 1 per cent, while its ongoing charge is 0.82 per cent. Meanwhile, the Defensive Multi Asset fund also charged an initial fee of 1 per cent, while its OCF is 0.92 per cent.

The move comes following the publication of the FCA’s interim report on asset management, which attacks underperforming active managers for charging high fees.

Miton Group head of sales Neil Bridge says: “The charges have been removed as these multi asset funds are not capacity constrained, and initial charges are therefore unnecessary to stem inflows at a later date. The change in the funds’ prospectus is part of Miton’s drive to deliver value and transparency to our investors.”

Both the Cautious Multi Asset and Defensive Multi Asset funds have underperformed their respective sectors over one and three years periods, according to FE.

The Cautious fund has returned 7.9 per cent and 12.8 per cent over one and three years periods respectively versus the 8.3 per cent and 14.6 per cent of the IA Mixed Investments 20%-60% Shares sector.

The Defensive Multi Asset fund has lagged the IA Mixed Investments 0%-35% Shares sector, returning 4.2 per cent and 7.9 per cent over the same periods versus the sector’s 6.7 per cent and 12 per cent.

However, the funds have outperformed their benchmarks since Jane and Rayner start managing them in June 2014. The Cautious Multi Asset fund has returned 16.9 per cent against the 11.11 per cent of its benchmark, while the Defensive Multi Asset fund returned 11.6 per cent versus the 9.4 per cent of the sector.