At least 30% of large actively managed UCITs equity funds do not comply with European Union disclosure rules, according to investor rights campaign group Better Finance.
The research, which analysed 2,033 EU-domiciled funds with at least €50m assets under management and fees of over 0.65%, found 619 funds (30%) did not comply with KIID disclosure rules by failing to provide the required benchmark information in fund documents.
The KIID, which came into effect in 2012, aims to provide investors with a transparent and succinct fact sheet of critical information about the fund.
Of the 619 funds found to be in breach of one or more of their legal obligations, 98 were said to be "major offenders", meaning their KIIDs clearly indicate an index but do not publish its past performance. In addition, 145 funds claimed to not have a fund benchmark in their KIIDs, but this was found to be inconsistent with a public database reporting a fund benchmark for all these funds.
Moreover, out of the 165 funds accused of being "closet trackers" in a study by Better Finance last year, 67 failed to disclose their benchmark performance alongside their past performance, while 44 continue to breach the KIID disclosure rules, further research from this year shows.
Asset managers, whose "potential closet tracker" funds were accused by Better Finance of breaching KIID rules, include Fidelity, Franklin Templeton, Janus Henderson and Standard Life Aberdeen.
Guillaume Prache, managing director of Better Finance, said: "These persistent, widespread and clear breaches of EU investor protection rules in our view, as evidenced by this research, are yet another call on EU Public Authorities to urgently and adequately stop this ongoing detriment to EU citizens as savers and investors, especially in light of the current debate on the necessary reform of the European System of Financial Supervision."
Aberdeen Standard Investments, whose $266m SLI Japanese Equities fund was named, said in response: "All of our KIIDs are aligned with current regulations but we recognise that we can continually evolve our levels of disclosure and expect to do so during the process of integrating our heritage businesses over the next few months, reflecting our support for many of the conclusions of the FCA's Market Study."
Janus Henderson responded: "We include benchmark data on our KIIDS when they are named in the objective and policy, as the rules prescribe, and performance against comparator/reference index is clearly shown our website and fund fact sheets for the four funds mentioned and across our wider product range."
A Fidelity spokesperson said: "EU regulations require a benchmark to be included in the prospectus and KIID if a fund is being managed to a stated index. These funds are actively managed and are not managed to track an index."
Franklin Templeton have been contacted for a response.
In March, the Financial Conduct Authority announced a number of asset managers had paid £34m in compensation to investors who overpaid for "closet trackers".
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