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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


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.”


On the sidelines

I suspect that many clients will not take waiver of premium any longer asit is now a separate contract and cannot be paid as part of the pensioncontrib-ution and must be paid from the individual&#39s bank account. This is not very convenient for members of group schemes. No doubt, some companies will not bother to […]

Grosvenor Kleinwort Benson – Residential Property Investment Fund

Thursday, 9 August 2001. Type: Ucits. Aim: Growth by investing in prime Cenral London residential property. Minimum investment: £100,000. Place of registration: Guernsey. Investment split: Property 100 per cent. Isa link: No. Charges: Initial 2 per cent on invesments up to £250,000, 1.5 per cent on any additional amount above £250,000. Commission: 2 per cent […]

Skipton revamps arm for sub-prime sector

Skipton Building Society is to become the latest mainstream mortgageprovider to enter the sub-prime market by transforming a subsidiary intoits specialist lending arm. The UK&#39s sixth-biggest mutual is planning to launch a range of low tomedium-risk sub-prime products this week through subsidiary SkiptonMortgages, which previously focused on acquiring the mortgage books ofrival lenders. In a […]

Skandia targets trustees

Skandia&#39s pension trustee bond is a unit-linked bond that invests in unittrusts, Oeics and investment trusts. Considering how the bond fits into the market, Elms says: “With the fundchoice and access to Skandia&#39s with-profits-type guaranteed pension fund,this offers real choice to trustees without the admin hassle ofmulti-providers.” Bumford says: “With the increasing popularity of self-invested […]

Passport - thumbnail

Thinking of expanding overseas?

Whether you’re a small company or an established larger employer, expanding overseas into emerging markets can be an extremely attractive prospect for growing your business. However, with this comes a duty-of-care requirement to any staff based overseas.


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