ESMA: Fees erode 25% of retail investors' fund returns

Passive equity funds ‘consistently’ outperforming active counterparts

clock • 2 min read

Fees charges for UCITs fund products are reducing investors' gross returns by 25% on average, new research from pan-European regulator ESMA has revealed.

ESMA's first Annual Statistical Report on the cost and performance of retail investment products across Europe is the latest regulatory intervention signalling greater pressure on asset managers to provide value for money for investors. The regulator said costs represent "a significant drain on fund performance", which impacts retail investors "to a much higher extent" than their institutional counterparts, which on average pay half as much in fees. In addition, active equity products were found to "consistently" underperform their passive counterparts in terms of overall returns, des...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Regulation

FCA urged to add ethical funds SDR label

FCA urged to add ethical funds SDR label

'We will carry on lobbying to try and change the rules'

Cristian Angeloni
clock 07 October 2024 • 1 min read
FCA's SDR regulation will 'make advisers sit up and listen'

FCA's SDR regulation will 'make advisers sit up and listen'

‘There has to be a fundamental re-educating of the adviser community’

Isabel Baxter
clock 30 November 2023 • 4 min read
Advice/guidance boundary review will help 'bridge advice gap'

Advice/guidance boundary review will help 'bridge advice gap'

The FCA’s latest update leads to mixed reactions from the industry

Sahar Nazir
clock 04 August 2023 • 4 min read