Aberdeen moves to keep LIC competitive

AberdeenLeaders (ALR), one of the longest running listed investment companies (LICs), has slashed its management fee following the announcement of a third fully franked interim dividend of 1 cent per share for the year to date.

The management fee has been cut by 28 per cent to 0.90 per cent per annum, and will take effect from 1 April 2004.

ALR director Charlie Macrae says the reduction will ensure the management expense ratio remains competitive in the current market, which has been flooded by a new wave of LIC launches.

ALR has also expanded its investment mandate to include stocks in the S&P/ASX 200 Index.

“ALR expects the change in the investment mandate to be well received by the market. Our current model portfolio has a strong weighting in the S&P/ASX 50 and Aberdeen was ranked 11th of 64 by Mercer on its three year annualised returns at the end of December 2003,” Macrae says.

The ALR board has also agreed on a 20 per cent performance fee for the manager, to be paid where the fund outperforms the S&P/ASX 200, after charging the investment management fee and the administration fee of 0.15 per cent.

The changes follow on from last week’s announcement of a share buyback, which will see the company buy back more than 5.9 million shares over the 12 month purchase period, equating to 10 per cent of the issued shares.

The Aberdeen Leaders fund has been operating since 1987, making it a veteran of the LIC market.