M
mercman
Guest
Fund management fees eat away an average of 43% of investors' returns over a 10-year period, according to an investigation by magazine Money Observer into the true cost of investing.
Equity funds were the worst for eroding gains, with just investors receiving an average of just 57% of returns after charges.
"Management fees might not make much of a difference over a year or two. But over a decade, it adds up to around half the underlying performance of the average based equity fund," said Money Observer.
Equity fund managers maintain that the high charges are justified because they fund the research that allows them to root out the best undervalued companies to add growth to their portfolios.
The editor of Money Observer magazine, said: "Our investigation reveals that a truly shocking amount of money has been taken out of open-ended funds by their managers. What's even worse is that these figures take no account of the private investor's buying and selling costs, which would further reduce any gains they have made, or magnified their losses.
"We are calling on fund management groups to make their charges far more transparent and, as UK investors pay the highest charges in the world for active fund management, they must also be reduced."
Equity funds were the worst for eroding gains, with just investors receiving an average of just 57% of returns after charges.
"Management fees might not make much of a difference over a year or two. But over a decade, it adds up to around half the underlying performance of the average based equity fund," said Money Observer.
Equity fund managers maintain that the high charges are justified because they fund the research that allows them to root out the best undervalued companies to add growth to their portfolios.
The editor of Money Observer magazine, said: "Our investigation reveals that a truly shocking amount of money has been taken out of open-ended funds by their managers. What's even worse is that these figures take no account of the private investor's buying and selling costs, which would further reduce any gains they have made, or magnified their losses.
"We are calling on fund management groups to make their charges far more transparent and, as UK investors pay the highest charges in the world for active fund management, they must also be reduced."