ITs benefit from lower TERs

total expense ratios are lower on investment trusts than on their open-ended counterparts

Investment trust investors may have to contend with the complexities of discounts and gearing on performance but can take heart from the fact total fees are lower than on unit trusts and Oeics. Statistics compiled by fund research firm Fitzrovia show investment trusts are cheaper to run than their open-ended equivalents but the gap is not as dramatic as it appears by simply considering management fees. Total expense ratios (TERs) include all drags on performance such as administration, custody and audit fees, as well as the annual management charge. Comparisons between the two vehicles ar...