Open or closed-ended: Which funds offer more value for money?

Ed Morse, head of investment trust business development at F&C Investments, examines the charging structures of closed and open-ended funds and asks which offers more value for money

With the Retail Distribution Review (RDR) fast approaching, there will be increasing focus on transparency of fees, which will centre on differences in value for money between open-ended funds and investment trusts. From this perspective, investment trusts have something of an advantage as they generally have lower charges on a like-for-like basis. With lower annual management fees, it is obvious one should expect investment trusts to deliver better returns than equivalent open-ended funds and there have been a number of studies over the years that have demonstrated this has indeed been ...