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10 per cent drop in equity fund charges

Average equity fund charges fell by more than 10 per cent in the first

quarter of this

year, according to new data

from Lipper.

The average annual management fee for UK-based equity funds dropped to

1.14 per cent from 1.29 per cent.

The average front-end charge on funds fell to 4.1 per cent

from 4.51 per cent last year.

Bond fund charges bucked the trend, however, with the average initial

charge rising to 3.79 per cent from 3.36 per cent. The average bond fund

annual charge rose margin-

ally to 1.03 per cent from

1 per cent.

The UK still has one of the highest-charging mutual fund industries in

Europe.

Lipper figures for 2000 show that only funds domiciled in Jersey and the

Isle of Man have higher equity fund front- end charges than the UK.

The average equity fund

initial charge across Europe was just 2.43 per cent last

year compared with 4.51 per cent in the UK.

However, the UK&#39s average annual charges are lower, with an average equity

fund charge of 1.29 per cent last year

compared with 1.49 per cent

in Europe.

Simpsons partner Andrew Merricks believes that fund managers deserve high

char-ges if they perform well but says there is a lot of mediocre managers

who are overpaid.

He says: “Those managers that do charge highly should be exposed for

ripping people off if they consistently fail

to perform.”

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