Sentinel Turns to Expense Caps
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Thursday, September 13, 2012

Sentinel Turns to Expense Caps

Sentinel Investments [profile] is temporarily applying expense limits on two of its funds.

The Montpelier, Vermont-based firm capped fees on Class A shares of Sentinel Growth Leaders Fund [prospectus] and Sentinel Total Return Bond Fund [prospectus] as of Sept. 1 in a move to build scale, senior VP and head of marketing C. R. Shaw and VP of product management John Haase told the MFWire in a phone interview today. The caps will stay in place until at least March 31, 2013,

The Growth Leaders Fund which is PMed by Kelli Hill and boasts $29 million in AUM will limit fees to 1.45 percent of the average daily net assets. Meanwhile the $115 million Total Return Bond Fund, which is managed by Jason Doiron, will cap at 89 basis points.

"The primary reason for lowering the expense ratios is to become more competitive," Haase said in a phone interview. "The two funds are small funds and don't have scale to hit some expense break points. In the interim, the intent is to lower the fees, which provides better value to shareholders and allows us to become more competitive into those peer universes."

Haase added that getting below the 1 percent mark is critical in ensuring funds are included in advisor and home office analyst searches.

Haase expected that caps for the Growth Leaders and Total Return Bond funds would be extended come March 31, 2013 which is when Sentinel updates its annual prospectuses depending on how much the funds have grown by then. He added that expense caps "typically do get extended."

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