The writing may be on the wall for mutual fund providers, with one industry giant moving Monday to slash management fees in a bid to shore up its ship.
The writing may be on the wall for mutual fund providers, with one industry giant moving Monday to slash management fees in a bid to shore up its ship.
The firm announced fee reductions on two of its funds – the Access Capital Community Investment Fund and the RBC SMID Cap Growth Fund. The company also launched Class A shares for four funds sub-advised by its London-based affiliate including the RBC BlueBay Emerging Market Select Bond Fund, RBC BlueBay Emerging Market Corporate Bond Fund, RBC BlueBay Global High Yield Bond Fund and RBC BlueBay Absolute Return Fund.
“These initiatives are part of an ongoing effort to increase our presence and grow our business in the retail advisory marketplace, reflecting our commitment to the professional buyer market and U.S. investors,” said Mike Lee, CEO and CIO of RBC GAM-US in a release.
As of September 9, the annual management fee of the Access Capital Community Investment Fund was reduced by eliminating the management fee charged on assets purchased with borrowed monies. Its investment policies were also modified to allow a portion of total assets to be invested in securities rated below the highest category by a nationally recognized statistical rating organization such as S&P or Moody’s. (continued on Page 2.)
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Additionally, at least 75 per cent of total assets will be invested in securities having a rating in the highest rating category recognized by a statistical rating organization, or issued or guaranteed by the U.S. government, government agencies, or government sponsored enterprises. The remainder of the fund’s total assets will be invested in First Tier Holdings or in securities rated at least in the second highest category.
As of November 27, the RBC SMID Cap Growth Fund’s 1.35 per cent gross expense ratio and the 1.10 per cent net expense ratio of the Class I shares were reduced to 1.08 per cent and 0.85 per cent, respectively. The 1.60 per cent gross expense ratio and the 1.35 per cent net expense ratio of the Class A shares were also reduced to 1.47 per cent and 1.10 per cent, respectively.
The introduction of Class A shares for the four RBC BlueBay Funds was also introduced on November 27, making the funds’ global and emerging market fixed income investment expertise more accessible to U.S. investors. The new shares require a lower minimum initial investment of $2,500, instead of its previous minimum of $1 million.
