Fees & charges

N.B. There are NO entry, exit or switching charges, no soft commissions, bid-offer spreads or other such hidden fees in any of Bedlam's charging structures.* (see note below). Full details of fee structures are in the Prospectus.

'A' shares and 'B' shares differ only in their charging structure.

This fee structure was introduced in January 2005 following a change in FSA regulations, removing the bar on performance-related fees for collective schemes; a less complex (and arguably fairer) model than our original A share structure (see below) allowed at launch.

There is a low, base annual management charge of 1.25% (levied irrespective of performance) and then a performance fee (accrued daily and paid quarterly) of 20% of clients' absolute gains over two key hurdles. The first is the three-month money market sterling deposit rate (the Lloyds TSB rate is used) and the second, an ever-rising high watermark, which is the fund's respective all-time, quarter-end high NAV (adjusted for subsequent distributions). This is a key (and rare) attribute of the B shares, ensuring that performance fees are payable only after the NAV of the fund rises above its previous all-time, quarter-end high.

(** subject to ever-rising high watermark principle)

Our original "No Gain No Fee" structure. No fees are charged until after the fund has made an absolute return of 1.25% or more per calendar quarter. Fees are accrued daily and paid quarterly.  If we fail to beat this hurdle rate the accrued fee on shares held at the quarter-end is rebated to the fund. The management fee is capped at 1.25% per quarter (net of the minimum quarterly client gain of 1.25%) where the hurdle rate is surpassed. To illustrate:

In the case of both structures, Bedlam remains crucially incentivised to make clients absolute returns. We are often asked which structure is 'better'. The impartial answer is that the A share structure is the better on 'straight line' returns of 5% p.a. or less, as no fee can ever be charged. On straight line returns between approximately 6% and 9% p.a., the A share is relatively poor value as much of the gain in that range is taken by way of fees to Bedlam. However, on returns higher than the mid-teens p.a., the A share structure then becomes cheaper (again on a straight line basis) than the B shares.

* N.B. An anti-dilution levy of up to 1% is payable (to the fund, not to Bedlam) in the event of redemptions in excess of 1% of a fund's NAV. This is to minimise any negative impact of large redemptions on existing fund-holders, in the absence of a bid-offer spread.

See also