JP Morgan Asset Management is lowering operating and administration (O&A) costs on a number of share classes in its Luxembourg Sicav fund range and moving to variable O&A costs with expense caps effective 1st July 2015.
O&A costs are being reduced by 10 basis points on the A, D and T share classes of many equity, emerging markets fixed income and multi-asset funds through the introduction of lower expense caps.
This will immediately pass along the benefits of continued growth to shareholders while providing certainty of the maximum O&A costs that may be incurred.
What were previously fixed basis points expenses will be replaced with expense caps, which will be set at the current fixed basis point rate or a lower rate based on an analysis of the actual direct expenses of the share class. A combination of variable O&A costs and expense caps benefits shareholders regardless of fund size.
JP Morgan AM will also rationalise certain duplicative share classes, moving eligible clients into lower cost share classes. These changes, which will result in the reduction or renaming of approximately 300 share classes, help to reduce complexity and will mean that more shareholders experience lower cost share classes.
“Our first priority is always our fiduciary duty to our clients, so making these changes to ensure that they will be able to participate in the benefits of increasing scale is an important part of our ongoing client commitment.
“In light of the strong growth of our Sicav fund range, we have the opportunity to ensure that our clients benefit meaningfully. This is a win-win for our shareholders, in that any expenses above the cap are borne by the fund management company, but any reduction in expenses below the cap passes directly to shareholders,” said Massimo Greco, head of European Funds.