Actively-managed funds 'overcharging' investors by £6.7bn a year

Should be charging investors passive fees

Tom Eckett
clock • 2 min read

Fund managers could be overcharging UK investors an estimated £6.7bn a year for active funds which underperform their benchmarks, according to research from financial adviser Salisbury House Wealth.

The firm calculates that of over £1trn invested in funds in the UK, £924bn sits in active funds, around three quarters of which failed to beat their benchmarks. The assets sitting in these underperforming funds amount to around £690.2bn, for which investors are paying £10.2bn in fees every year.  An actively-managed fund costs investors on average 1.48%, while a passive fund charges only 0.5% on average. The firms argues investors are overpaying for these active funds, that should be charging passive prices. It calculated the total amount overpaid by investors for these underperfor...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on UK

Spring Budget 24: Monitoring framework for Mansion House Compact announced
UK

Spring Budget 24: Monitoring framework for Mansion House Compact announced

Working with ABI to ‘finalise a framework’

Jonathan Stapleton
clock 06 March 2024 • 1 min read
Spring Budget 24: Chancellor 'remains committed' to pot for life reforms
UK

Spring Budget 24: Chancellor 'remains committed' to pot for life reforms

Undertake 'continued analysis and engagement'

Martin Richmond
clock 06 March 2024 • 1 min read
Friday Briefing: Budget Day looms
UK

Friday Briefing: Budget Day looms

Friday Briefing

Eve Maddock-Jones
clock 04 March 2024 • 3 min read
Trustpilot