Standard Life, Norwich Union and Threadneedle have the cheapest Oeic ranges as measured by Total Exp...
Standard Life, Norwich Union and Threadneedle have the cheapest Oeic ranges as measured by Total Expense Ratios (TER).
This is one of the conclusions in the 1999 Unit Trust and Oeic TER Directory published by Investment Week's parent company City Financial Communications.
Standard takes the honours for being the cheapest across the range of its funds included in its Oeic, with 57% of its 28 share classes in the best or lowest TER quartile comprising 14 equity and two bond portfolios.
If only retail Oeic classes are considered then Norwich Union comes out top according the lowest percentage of TERs. 75% of its 16 retail Oeic funds are in the first quartile, while 46% of Standard's 13 retail funds analysed made the first quartile.
The report has a special mention for Threadneedle, which with 46 funds, had the largest number of Oeic sub-funds analysed and while only 11% made the first quartile, only 11% made the fourth quartile.
The report stated: "This means that the majority of Threadneedle's funds fall into the middle ranking quartiles which shows a very consistent policy on TERs particularly for such a large range."
The "worst' group of TERs for Oeics is Global Asset Management (GAM) which has 86% of its retail funds in the fourth quartile, although the report does qualify this by pointing out that GAM's multi-manager structure attracts an additional advisory fee.
The report added: "Interestingly, GAM's one true fund aimed at the retail market GAM Amalgam Unit Trust, does appear in the best TER quartile."
On individual funds size the Schroder Gilt & Fixed Interest Fund is the cheapest retail investment fund as measured by the TER out of nearly 1,300 funds analysed in the directory with an annual management charge of only 0.25% and a total TER of 0.3%.
Of the equity funds analysed the retail trust which scores best is the Royal SunAlliance FTSE All-Share Tracker Trust which has a TER of 0.34% and an annual management charge of 0.30%.
The report also highlights the cost of investing in small funds with assets of less than £10m, which account for over a fifth of the unit trusts analysed.
For all equity funds with assets between £2m and £10m the average TER is 1.85% compared to 1.26% for funds over £500m in size but for the smaller funds the TER can be as high as 3% in the most extreme cases.
*The 500 page Unit Trust and Oeic Directory TER 1999, with individual TERs on 1253 funds, published by CFC, costs £399 plus post and packaging and is available from Peter White at CFC on 0171-432 6954 or [email protected]
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