Britannic Asset Management is running a campaign called "Putting Our Money Where Our Mouth Is" and will rebate 1% of the standard 1.5% annual management charge if performance is poor.
According to Britannic, if the fund is not in the top half of its sector after three years, then a 3% refund will be given. This is a rebate of 1% of the initial investment for each of the three years.
Our View
By rebating 1% out of 1.5% for poor performance, Britannic will not actually be making any money. This is because the other 0.5% is generally paid out in commission to advisers. This really is Britannic putting its money where its mouth is. By attempting to be in the top 50% of a sector the company should produce at least average returns. If not, you will get two thirds of your money back.
Before we settle on a final verdict, we would like to see the actual conditions for refunds. If the 3-year period is rolling then investors will be fine. However, if the clock starts ticking each three years, investors could lose out.