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...

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