Discount Fees Attracts Money to BlackRock Style Advantage Fund

August 3, 2017 James Heinsman Company Spotlight

At a time when many, if not most hedge funds are losing assets, one fund has doubled its assets over the past six months.

BlackRock’s Style Advantage fund grew to $1.6 billion during the first half of 2017 doing something other funds have been fearful of doing: charging less than the almost sacred 1% management fee. Style Advantage took a risk and decided to charge its clients only .95% management fee, and nothing for performance. In addition, clients only need alert the fund three days in advance before withdrawing their funds.

BlackRock has already been charging super cheap fees on exchange-traded funds (ETFs), and saw that investors in hedge funds also want to save money. Style Advantage was launched in November 2015 as part of a group of strategies by Columbia University professor Andrew Ang. Style Ad is the most inexpensive fund of the 18 on the list.

Other funds have tried lowering their fees in response to the exodus of investors from the hedge fund market as a result of dissatisfaction with high fees and poor performance. In March Winton said it was going to cut its fee to 0.8% and 0.9%, depending on the size of the investment. Tudor Investment Corp and Brevan Howard have also lowered their fees.

 

Andrew Ang, BlackRock, fees, Style Advantage fund,

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