Higher fund total expense ratios are defended by asset managers

Low-cost US entrants to UK market have thrown a spotlight on total expense ratios

After a year of market mayhem on a scale not seen for over a generation, total expense ratios are beginning to become an issue alongside performance in fund selection. UK asset managers could also soon face further pressure from new low-cost entrants into the retail space, with major movers from across the Atlantic set to challenge the established marketplace in 2009. According to Morningstar the average TER for UK retail funds is 1.5%, with multi-manager or funds of funds tending to be at around 2%-2.5%, compared with some low-cost US fund managers, operating off around 20 basis points...