DIY Investor Magazine | Issue 29
Page 37 - DIY Investor Magazine | Issue 29
P. 37
• 0.70% of the first £100m of market cap;
• 0.65% between £100m and £250m; and
• 0.55% in excess of £250m.
THERE IS NO PERFORMANCE FEE.
The base management charge is a little higher than under Invesco so the trust’s next published cost figure may nudge close to 1% with admin costs added; that will make the trust quite a bit more expensive than the 0.53% total charges levied on the open-ended version, which is twelve times the size.
DIVIDENDS
Keystone is keeping its 2021 dividend flat compared to the previous year; there will be three interims of 2.4p per share in March, June, and September followed by a 4.0p final in December for a total of 11.2p.
From 2022 onwards, the dividend will just be the minimum required to retain investment trust status, i.e. 85% of income less expenses.
As the open-ended version only has a trailing yield of 0.3%, the trust’s higher expenses may mean it pays no dividend at all.
IN SUMMARY
In a recent interview the soon-to-be-retired Charles Plowden, senior partner of Baillie Gifford, said he regarded the firm’s investment trusts almost as a shop window for the larger wall of institutional money the firm manages elsewhere.
Indeed, its trusts, with £32bn of assets in total, account for just under a tenth of the £340bn Baillie Gifford looked after at the end of April.
I’m not sure I’m that keen to be thought of in that way, but I am happy to take a long-term view on this position; I’m expecting to see a lot more volatility along the way but also to be compensated for that by higher returns.
The more I hear Baillie Gifford’s various managers speak, the more I like their way of thinking, such as not worrying about short-term news, focusing on how the company is performing, thinking in decades, and not getting carried away by the bumper year they had in 2020.
I may well add more of the firm’s trusts to my portfolio over the next few years but I’m still mulling over exactly which ones.
Scottish Mortgage feels like a one-stop-shop for the best of Baillie Gifford, or perhaps Monks if I want to dial down the volatility a bit.
The likes of Baillie Gifford US Growth and Baillie Gifford China Growth could be interesting as well, although I would expect them to be more volatile than Keystone.
Schiehallion is another interesting trust, as it focuses purely on BG’s unquoted expertise, although I think it’s more difficult to buy in decent size.
To buy this trust login to your EQi account
Select Keystone Positive Change PLC - GB00BK96BB68
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37 DIY Investor Magazine | Jun 2021