Somerset Capital: Why we are sticking with 'contentious' dilution levy

Laura Dew

Somerset Capital has admitted a new dilution levy on its funds has proved 'contentious' despite being in keeping with an industry-wide drive to cost transparency.

The group has imposed extra charges for those buying and selling its emerging market OEICs last month, ensuring existing investors do not see their own unit prices diluted by these costs. The levy amounts to a 40bps charge for buying or selling Edward Lam’s £716m Emerging Markets Dividend Growth fund, a 50bps charge on Mark Asquith’s £36m EM Small Cap fund, and a 30bps charge on Edward Robertson’s £31m Global Emerging Markets fund. Having previously applied the charges to large investors only, Somerset said in May the move would apply to buyers and sellers of all sizes in a bid to dis...

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