BlackRock Throgmorton Trust has announced a change in the management fees payable to its manager, BlackRock Fund Managers Limited. Under the new fee structure, the base management fee will be reduced from 0.70 per cent. to 0.35 per cent. of gross assets per annum with effect from 1 August 2017.
The performance fee is also being increased from 10 per cent. to 15 per cent. of the company’s Net Asset Value total return outperformance of its benchmark, measured over a two year rolling basis, and will be applied on the average gross assets over two years.
Performance fee cap changing
The previous cap on the performance fee of 1 per cent. of average gross assets over a one year period has been replaced with a cap of 0.9% of average gross assets over a two year period. The new performance fee will be effective 1 December 2017 to coincide with the start of the new financial year of the Company. These arrangements will be reflected in the Investment Management Agreement between the Company and the Manager as a cap of 1.25% of average gross assets over a two year period which will apply on the total base and performance fee payable from 1 December 2017.
AIM exposure limit increased to 35%
The Company has also announced what it describes as a ‘non-material change to its investment policy’. Effective immediately, the Company will increase the restriction on its maximum exposure to equities or collective investment vehicles traded on the AIM market of the London Stock Exchange from 25 per cent. to 35 per cent. of the Company’s gross assets at the time of acquisition of investments. It says that the Board will continue to review whether the investment policy restrictions remain appropriate, including investigating the potential benefits of increasing the AIM exposure further, and ensuring the benchmark is suitably aligned to the underlying investments.
However, the Company says that it remains a focused small/mid cap fund with the ability to mitigate risk and improve performance by using CFDs and index futures to adjust both market exposure and generate additional returns.
About BlackRock Throgmorton
BlackRock Throgmorton Trust aims to provide shareholders with capital growth and an attractive total return through investment primarily in UK smaller and mid-capitalisation companies listed on the main market of the London Stock Exchange. In addition to holding a conventional long only portfolio of UK smaller and mid-capitalisation equities, the Company will hold approximately 30 per cent. of its net assets in a portfolio of contracts for difference (“CFD”) and/or comparable equity derivatives which provide both long and short exposure. Under normal circumstances, the long only portfolio is expected to comprise 100 per cent. of the Company’s net assets. Therefore, the Company can have gross exposure of 130 per cent. of net assets, albeit that some of this exposure represents short positions.
BlackRock Throgmorton reduces base fee, whilst upping its performance fee : THRG