Changes to Benchmark Index and Management Fee

RNS Number : 2904P

British Assets Trust PLC

30 September 2011

 



BRITISH ASSETS TRUST PLC

To:                   RNS

From:              British Assets Trust plc

Date:               30 September 2011

Changes to Benchmark Index and Management Fee Arrangements

Benchmark Index

The Board announces that, with effect from 1 October 2011, the Company's benchmark index will change from a composite of 75% FTSE All-Share Index and 25% FTSE World (ex UK) Index, to 80% FTSE All-Share Index and 20% FTSE World (ex UK) Index.

As at 31 August 2011, the Company's portfolio comprised a total of 77.0% in UK equities and corporate bonds, split 65.6% in UK equities and 11.4% in corporate bonds. The balance of the portfolio was invested in overseas equities, comprising two sub-portfolios, one of which invests in Global Developed (ex UK) markets and the other in emerging markets.

During October 2011, the Company intends to modestly increase its exposure to UK equities and corporate bonds to around 80% and reduce its exposure to overseas equities accordingly. Also with effect from October 2011, the Company intends to realign the Global Developed (ex UK) sub-portfolio to generate a higher level of investment income.

The Board pays particular attention to the level of dividend which it considers to be one of the Company's key attractions. It expects the changes detailed above to be beneficial to the level of dividend cover in the near future, whilst maintaining a significant  international equity exposure.

Management Fee Arrangements

The Board has agreed changes to the management fee arrangements with the Company's Managers, F&C Asset Management plc ('F&C').

F&C is currently entitled to a basic management fee, payable quarterly in advance, equal to 0.3% per annum of the value of the Company's total assets less current liabilities. F&C is also currently entitled to a performance-related fee calculated on an annual basis by reference to the performance of the Company against the benchmark index over each 12 month period to 30 September. The maximum performance-related fee which can be earned by F&C in respect of any annual performance period is 0.3% per annum of the value of equity shareholders' funds at the end of the period, depending on the level of outperformance. The maximum rate of performance-related fee is earned when the outperformance for a 12 month period is 3.0% or more.

With effect from 1 October 2011, F&C will no longer be entitled to a performance-related fee but the basic management fee will be increased to 0.4% per annum of the value of the Company's total assets less current liabilities. The basic management fee will continue to be payable quarterly in advance.

For further information please contact:

Phil Doel

F&C Investment Business Limited

0207 628 8000

Chris Lunn

Cenkos Securities Limited

0207 397 8900

 

END

 

 

MSCKBLBXFKFLBBQ