ETFs driving decline in fixed management fees

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Increased use of passive products including ETFs is driving down fixed fees, says Skandia Investment Group (SIG).

The SIG study shows many global asset management firms expect the use of performance related fees (PRFs) to rise across a range of asset classes. Two-thirds of those surveyed anticipate PRFs on equity funds to increase in the coming year, while half predict the same on absolute return vehicles. The survey follows a year in which the number of share classes available for sale in the UK with PRFs has risen from 1,433 to 1,952 - an increase of 36%. SIG says that if managers' expectations are realised, fee polarisation will occur. As managers move towards increased use of PRFs, pressu...

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