U.K. investors are paying twice as much for mutual funds as those in the U.S. and getting worse returns as a result of hidden fees costing as much as 18.5 billion pounds ($29.3 billion) a year, industry executives tell Bloomberg.
Opaque fee structures, which exclude trading charges that can double the cost of owning a fund, make it difficult for customers to compare products and hurt competition, according to executives at Fidelity Worldwide Investment, Fundsmith LLP and SCM Private LLP. U.K. and European Union regulators are taking note and have already moved to ban some commissions starting next year.
Faced with record low returns on cash and the closing of many company-guaranteed pension plans, British investors have flocked to mutual funds in the last three years even as hidden charges have dragged down performance. The fees paid to fund managers and passed on to brokers, traders and sales platforms have caused more U.K. actively managed funds to underperform their benchmarks than similar funds in the U.S., according to studies by the Vanguard Group Inc….
Don't stop now. Go directly to http://www.bloomberg.com/news/2012-03-23/hidden-fund-fees-mean-u-k-investors-pay-double-us-rates.html
No comments:
Post a Comment