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Kames drops fees up to 30bps across bond range

Asset manager undercuts Artemis fund launched for Stephen Snowden


Sebastian Cheek

Kames Capital has undercut the Artemis fund recently launched for Stephen Snowden in a shake-up of fees across its fixed income range, Portfolio Adviser has learned.

The changes, which take effect from 1 January 2020, will see the charges on the B share class of the UK and Dublin-domiciled bond fund ranges cut by up to 30 basis points (bps).

In an announcement to clients seen by Portfolio Adviser, Kames said the decision was part of a business-wide review of its products, services and fund range “to ensure we continue to be competitive and provide our investors with value for money”.

The changes apply to nine funds in total: five UK and four Dublin-domiciled. The largest OCF discount applies to the Dublin-domiciled Kames Investment Grade Global Bond fund which has a current OCF of 0.7%, reducing to 0.4% in January.

Kames bond fund fee cuts

Source: Kames Capital

The move, which applies to new and existing investors, follows the repricing of the Kames Absolute Return Bond Fund in April this year which saw the B share class fee cut by 35bps to 0.30% from 0.65%.

The cuts will see Kames more on a level footing with some of its peers on bond fund charges. For example, the new 0.39% OCF on the Kames Corporate Bond fund is 1bps cheaper than the recently announced Stephen Snowden-run Artemis Corporate Bond Fund of 0.40%.

Snowden left Kames last year for Artemis alongside high yield managers David Ennett, Stephen Baines, and Juan Valenzuela, who co-managed sterling and global strategic bond funds. Just over a year earlier, in August 2017, David Roberts and Philip Milburn exited to join Liontrust.

AJ Bell head of active portfolios Ryan Hughes described the cut as a step in the right direction which brings Kames’ fixed interest fund range more or less into line with the main players in the fixed interest space.

He said: “Bringing Sterling Corporate Bond down to 0.39% is certainly where we would want it to be, given where Artemis has launched its new fund and where the likes of Twentyfour are with sub 0.40% seemingly becoming the new key level. It will be interesting to see if others respond to this.”

But Hughes said other funds in the range remain expensive. He noted the Kames High Yield Bond fund remains more than 0.20% per annum more expensive than the 0.37% Baillie Gifford High Yield Bond fund even after the reductions.

“Importantly though, we have seen Kames respond to criticisms coming from us and others that their fixed interest range was too expensive and these reductions are welcome,” Hughes added. “There certainly seems to be some price competition in the fixed interest space, but as yet, this doesn’t seem to have made it to equity funds for the time being.”

Kames has been rebuilding its fixed income team, led by head of fixed income Adrian Hull (pictured), this year. In May it hired Thomas Hanson as head of high yield and Eleanor Price as a high yield investment analyst.

This followed the appointment of Jill Shaw and Thomas Dickson from Aberdeen Standard Investments in March and that of Laurent Frings, also of Aberdeen Standard, in December to head up its credit research operation. Bjorn Norrman joined from Fitch Ratings in March to specialise in credit analysis in the global financial sector across the entire capital structure.