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Investment Trust fees – should they be based on market cap or NAV?

The ShareSoc blog provides news and informal commentary from directors, members and other contributors. Entries reflect the personal views of the authors, which do not necessarily reflect ShareSoc’s formal position. Contributors may hold shares in the companies mentioned. Nothing in this blog should be viewed as financial advice. You may submit comments on blog posts, but ShareSoc reserves the right to remove or edit inappropriate or defamatory submissions.

The views expressed in this article are those of its author and not necessarily those of ShareSoc.

Should Investment Trusts (including VCTs)  base their fees on market cap and not Net Asset Value?

In the case of of Chrysalis Investments (CHRY), the 58% discount to NAV means the 0.77% fees as a % of NAV are in excess of 1.5% of market cap, which in my opinion is egregious:

 

A story in Investment Week “Chrysalis managers stand by unlisted holdings” https://www.investmentweek.co.uk/4055056/ also highlighted the issues.

By Cliff Weight, Director ShareSoc

DISCLOSURE: The author does not hold shares in Chrysalis Investments

Post Date: August 25, 2022

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