Bringing you live news and features since 2006 

Lipper calls for clearer disclosure of fund performance fees


Lipper has identified 81 open-ended funds in the UK with performance fees in place, a rise of 138 per cent from the 34 funds identified at the end of 2007 but still less than five per cent of the industry’s total number of funds.

Among hedge funds where Lipper has calculated total expense ratios, the asset-weighted average is 1.82 per cent and the mean is 2.48 per cent — before the impact of performance fees, which can often double the level of operating expenses incurred.

The report says: “Clearer disclosure of such costs would certainly help investors.”

Two thirds of UK funds (66 per cent) can charge a performance fee if the fund outperforms a falling index. 

Among those funds that must beat an index to earn a performance fee, fewer than a quarter (22 per cent) use a cash-like index (such as Libor), indicating that far more funds than just those seeking absolute returns use performance fees.

Lipper has published its ten-point list of fee standards for hedge funds, which can be used as guidelines for disclosing fees and expenses by fund companies, as well as a checklist for investors’ due diligence.
Ed Moisson, author of the report, says: “Three themes emerge in the report: the need for companies to demonstrate they are aligning their interests with those of investors, the clarity and range of information for investors, and the onus on fund companies to take on a fiduciary responsibility in relation to fees.”

Latest News

News came last night from the US that the SEC has approved CBOE’s proposal to list and trade VanEck’s spot..
Irish domiciled funds surpassed EUR4.3 trillion AuM (Assets under Management) at end-March 2024, a 15 per cent increase in net..
European white label ETF platform, HANetf, has announced its total assets under management (AUM) has now exceeded USD4.31 billion...
New research from European ETF provider Tabula Investment Management shows investors are expecting improvements in ESG from the gold mining..

Related Articles

Timothy Rotolo, Range Funds
In 2023, Timothy Rotolo launched his business, Range Fund Holdings, the parent company for Range Indices and Range ETFs, followed...
Dan Miller, IQ-EQ
With just over a week to go till T+1 settlement begins in North America, Canada and Mexico, time is of...
Emily Spurling, Nasdaq
Last October’s ETF Express US Awards 2023 found Nasdaq winning Best Index Provider – ESG ETFs and Best Index Provider...
Vinit Srivistava, MerQube
Index provider, MerQube, launched in 2019, with the aim of providing a “technology-driven answer to the most complex, rules-based investment...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by