Fund charges failing investors, says Morningstar

Professional Adviser
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Investment research provider Morningstar has hit out at fund groups for failing to provide transparency on management fees.

It points out that most UK investment funds charge annual management fees of 1.5%, which hints at price fixing. The average US mutual fund AMC is only 0.75%, and the greater diversity of fees on offer suggests genuine competition in the American market that is lacking in the UK, where hidden costs mean investors often do not know what they are paying for. Although the total expense ratio (TER) employed by Ucits funds gives a more complete picture of the costs of running a fund, Morningstar says it still misses out a couple of measures. It proposes a single “all in” number that includes all...

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