Kames Capital is to lower the annual management charge on the Kames Investment Grade Global Bond Fund following a review of the fund’s positioning in the European markets.
The move will see the AMC on the Kames Investment Grade Global Bond Fund B share class fall to 0.65% from its current rate of 0.80%, while for the A share class the charge will drop to 1.15% from 1.30%. The changes will take effect from the 1st April 2015.
As part of the review, Kames will also be changing the benchmark of the fund to the Barclays Global Aggregate Corporate Index from the Lipper Global Bond Global Corporate Median.
The changes are intended to bring the fund into line with its peer group particularly in Continental Europe. Whilst there will be no change to the investment process of the fund, there will be a slight change to the fund’s duration. In order to maintain its index-neutral duration, the Fund will now be aligned to the Barclays Global Aggregate Corporate Index which has a duration of around 6.4 years. This compares to the existing Lipper peer group which has an estimated duration of 5 years.
Commenting on the changes Kames Capital’s head of retail sales Steve Kenny says: ‘We are doing this to bring the fund into line with how European investors compare investment grade bond funds. We researched the markets extensively and found that investors typically compare funds with index type benchmarks rather than peer groups.
‘There are two clear benefits for us to do this, firstly the fund’s performance and risk statistics are more transparent when measured against the Barclays index and secondly, risk management is more effective as we can use index-based measures such as tracking error to demonstrate the fund’s characteristics.’