Miton UK Microcap Trust cuts fees as portfolio outperforms
Positive return mirrors benchmark’s negative
Miton UK Microcap Trust has cut its annual management fee in response to outperformance driving a widening discount to net asset value (NAV) on its share prices.
As of 1 September, the annual management fee for the trust has been reduced from 1% to 0.9% of NAV per annum.
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The trust has also enjoyed strong outperformance year-to-date, which it attributed to its micro-cap investments being "less reliant on the growth of the UK economy" and also to a put option it placed against FTSE100 stability.
The option would "marginally detract" from the trust's returns if markets were stable, but as the year played out in the way it has thus far, it was able to sell the put option for "a multiple of its book cost".
These returns were used to fund "additional investments" during a period in which valuations were at "unusually low metrics", which in turn benefited the trust's participation in the stockmarket recovery.
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Year-to-date, the trust has seen its NAV rise 19.1% compared to the FTSE All Share's negative returns of 19.8%, while since its IPO in April 2015, the NAV has increased 32.3% as opposed to the FTSE All Share's 7.2% rise.
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