The base management fee is calculated at the rate of 0.70% per annum of chargeable assets under management with an additional annual performance related element.
A performance fee is charged if the adjusted Net Asset Value (NAV) of the ordinary shares at the end of any calculation period exceeds the high water mark (the uppermost point in value that the Trust has reached) represented by the formula asset value of 269p per share calculated as at 2 July 2002 (being the date following the repayment of the zero dividend preference shares). The fee will be paid to the Manager in respect of the calculation period (which is the accounting reference period) at the rate of 15% of any outperformance of the NAV total return per ordinary share, in excess of the total return over the same period of the Company’s benchmark, the FTSE World Europe (ex UK) Index (sterling adjusted). If the NAV total return of the ordinary shares underperforms the benchmark, no performance fee will be payable until the underperformance has been made good.
The performance fee is subject to the following conditions:
(a) the aggregate amount of the management/custody fee and any performance fee payable in respect of any calculation period will not exceed Company on the last business day of such calculation period. If condition (a) applies, the high water mark will be adjusted downwards accordingly, and
(b) no performance fee is payable if and to the extent that the adjusted NAV per ordinary share on the last business day of the calculation period in question is less than 90% of the NAV per ordinary share on the last day of the previous calculation period.
Morningstar calculates all expenses for the financial year, consisting of management fees, performance fees, directors' fees, administration fees, custody fees, audit fees, marketing fees, loan interest, tax, restructuring costs and all other expenses given in the Statement of Total Return and notes in the Report and Financial Statements. They subtract performance fee, restructuring costs, transaction costs, compensation scheme expenses and trail commission then calculate the average daily net assets on a cum fair basis, then divide the total expenses by the average daily net assets and multiply the resulting figure by 100 to arrive at this ratio.
Please note, not all companies have yet adopted ‘ongoing charges’ as the methodology in their Annual Report and Financial Statements. This may mean there are differences between the charges shown on our factsheets and website and the TER shown in the Annual Report.