Performance matters: Can the IMA solve fund charges conundrum?

The Investment Management Association (IMA) is struggling to find a "perfect" solution to calculating fund performance following the shift to clean pricing, and may have to devise a completely new approach.

The trade body last year held back from releasing new recommendations about how it would calculate fund and IMA sector average returns, stating it wanted to wait for the release of clean and super clean preferentially priced share classes. As a result, all performance statistics are still based on bundled share class performance, with returns reported after the impact of an annual charge which is typically 1.5% per annum for an equity fund. Now, with commission and platform fees stripped out, the starting point for a clean share price is around 0.75%, but the IMA has yet to adjust its...