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, to offer a less complex and unpredictable (and arguably fairer) model than the original A share structure (see below) available at launch. There is a base annual management charge of 1.25% and (as from October 2013) no performance fee payable.
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.
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