Think-tank calls on fund managers to give annual return estimates

A wide-ranging report from the Centre for Policy Studies has called on fund managers to provide an estimated annual return figure for clients to improve transparency.

The report, written by pensions analyst Michael Johnson who worked as an investment banker for 21 years, argues the industry needs to provide what he called an Indicative Net Return estimate to help improve the industry. "Fund managers should provide an Indicative Net Return (INR), using a standardised range of conservative (i.e. gilt-based) assumptions for fund return," said Johnson. Johnson added the Total Expense Ratios (TER) currently used were 'misleading and inadequate' because they only captures explicit expenses charged directly to a fund, and exclude trading costs and commiss...