Bringing you live news and features since 2006 

Fall in charges for European funds


Expenses paid by fund investors in Europe have fallen in the past three years, according to a research paper by Morningstar.

The paper – European Fund Expenses are Decreasing in Percentage – offers expense analysis of some 54,000 share classes available to investors in Europe.
It reveals that while the asset-weighted ongoing charge for the European fund universe has fallen to 1 per cent, down from 1.09 percent in 2013, investors now pay more in nominal values than in 2013, with the increase in managed assets more than offsetting the drop in the ongoing charge.
Asset-weighted ongoing charges in the predominantly institutional and high-net worth domiciles of Ireland and Switzerland are well below the European average; in Italy, Spain, France, and Belgium, fund expenses are on average higher relative to other domiciles. In Denmark, Germany, Italy, and Spain, asset-weighted ongoing charges have increased.
Funds available to investors in Sweden, Germany, the Netherlands, and Switzerland exhibit the highest degrees of economies of scale; conversely, investors in Belgium, Denmark, and Portugal enjoy no economies of scale benefits.
Investors in Denmark pay more in fees the larger their fund company, suggesting that Danish investors are better off choosing funds from fund companies with fewer assets.
Across the broad asset classes, the asset-weighted ongoing charge for equity, fixed-income, and allocation funds in Europe decreased overall.
On average, the European charge reduction for a commission-free equity share class is 46 basis points.
Overall, 10.3 per cent of equity fund assets studied are invested in passive funds, up from 8.0 per cent in 2013; in general, the study finds that increased penetration of passive funds is inversely related to the asset-weighted ongoing charge for such funds.
“There is clearly some good news for investors here that fund fees – in many cases – are coming down in Europe,” says Nikolaj Holdt Mikkelsen, chief analyst for Morningstar Denmark. “However, investors really do have to do their homework and take care to shop for a good deal. The new commission-free share classes have brought average fund costs down in some markets, but investors elsewhere are on average paying more now in asset-weighted expenses than just three years ago when Morningstar conducted a similar Europe-wide study.
“The 2016 study also shows that expensive funds have a tendency to remain expensive and cheaper funds will continue to be attractive in the future. This suggests that past ongoing charge levels are a strong predictor of future levels.”

Latest News

Figment Europe, a provider of institutional staking infrastructure, writes that it is solidifying its presence in the heart of Europe’s..
Saving and investing app, Moneybox, has doubled the number of ETFs available on the platform, in the light of ‘growing..
Global X ETFs has announced the appointment of Ryan O'Connor as its Chief Executive Officer effective as of April 8, 2024. ..
Value-driven structured credit investing firm, Angel Oak Capital Advisors, LLC, has announced the completed conversions of two of its mutual..

Related Articles

Ryan McCormack, Invesco
This year sees the 25th anniversary of Invesco’s QQQ, the USD240 billion ETF – the fifth largest ETF in the...
The European ETF market achieved a record 28 per cent growth – reaching over USD1.8 trillion assets under management (AUM)...
Sal Esposito, Zacks Investment Management
Zacks Investment Management started doing investment research in 1978 and in 1992 started its investment management arm, initially with SMAs...
Jeremy Senderowicz, Vedder Price
Jeremy Senderowicz, a member of the Investment Services Group at law firm Vedder Price, has witnessed a steady upswing in...
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