Boston-based
Numeric Investors will be sending out its annual report to shareholders on Nov. 1, informing them of its intent to change its fee structure, according to
Lynn Wickwire, director of marketing for Numeric. The exact details were first sent in a proxy statement, with shareholders voting on Nov. 22.
Langdon Wheeler, the chairman of Numeric, calls the proposal an "endorsement of Numeric's existing business practices," stressing that actively managed funds should do everything in their power to ensure the fairness of fund fees.
Numeric is proposing a fulcrum or performance-based fee structure that increases the funds' management fee as the funds beat an appropriate benchmark or decrease the fee if the funds lag their benchmark. The company is also proposing a change in the administration fees paid to the funds' transfer agent and fund administrator,
PFPC Worldwide.
The no-load, no 12b-1 fee funds currently have a 100 basis point fee structure, with 75 basis points going to Numeric and 25 to PFPC. If the new fee structure is approved, the funds would have beat their benchmarks by 4% to match that 75 basis point fee. If the funds beat their benchmarks by 9% or more, the management fee would grow to 135 basis points; if the funds lag their benchmark by 1% or more, the fee would decrease to 35 basis points.
The administrative portion of the funds fees would also be changed in the proposal, with the fee varying depending on the assets under management in each fund. That portion of the fee structure would be capped at 50 basis points, at the lowest asset levels, with the fee decreasing as assets grow.
If approved by shareholders, the changes would go into effect on Jan. 1, 2001, because of the year needed for data collection.
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