The European Securities and Markets Authority (Esma) is turning up the heat on asset managers, highlighting the impact of fund charges on returns in a fresh report. Fund fees wipe out an average 20% of gross returns, according to the regulator.
State Street has ramped up the competition among the biggest US ETF providers by slashing prices across 15 ultra-low cost trackers.
Fidelity International’s announcement that it will implement a performance-based fee sparked mixed reactions in the industry. As always, the devil will be in the detail.
Fidelity International is the first major asset manager to make a switch to a “value for money” charging structure. The asset manager will give money back to clients when its funds underperform.
Deutsche Asset Management and Franklin Templeton are the latest firms to reveal they will take on the cost of research once Mifid II comes into force next year.
Asset managers are seeing their margins being eroded because remuneration paid to fund managers and analysts is increasing while management fees are coming down, research has found.
The time has come to offer investors a fairer deal and drop fixed fees for performance-based charging, Morningstar’s head of global manager research Jeffrey Ptak has said.
Performance fees are often seen as a necessary evil. But the unambitious hurdle rates most funds employ mean fund managers also get rewarded for underwhelming performance. Is that fair?
When investors decide to buy a fund that charges higher-than-average fees, they presumably do so because they expect the manager to compensate for this by delivering outperformance.
The UK financial regulator FCA wants asset managers to introduce an all-in fee for funds, claiming it would aid simplicity and clarity for retail investors.
UBS Asset Management has slashed the fee on its ETF Barclays fund after attracting $470m (€437m) of inflows in less than seven months.
Asset managers in Europe must reduce the cost of their products, Steven Maijoor, chair of the European Markets and Securities Authority (Esma) has warned.
