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Investors say reward fund managers for performance

Investors have told the AITC that they want to see more managers rewarded for good performance.

Almost two out of three investors say managers should be reimbursed commensurate with their results.

But only one in 10 investors makes their investment decisions based on recommendations from advisers.

The research also shows that investors look at risk, fund manager experience and dividends before they look at a fund’s previous results.

When assessing a fund, one in five investors thinks the risk characteristics of the investment vehicle are crucial and 17 per cent think fund man-ager name is important.

Just one in 10 investors rates past performance when choosing a fund while 16 per cent think dividend levels are a priority. Just 6 per cent make a decision based on the brand of the investment company.

Almost half (47 per cent) of investors think dividends are an added bonus but that long-term growth is key.

Communications director Annabel Brodie-Smith says: “It is encouraging to see that for most active investors, past performance is not the main driver when it comes to choosing a fund. Investors are looking for a much wider range of criteria.

“The increased warnings about past performance have had an impact although in many cases, past experience also may well have made active investors more cautious. “It is good to see investors taking a positive stance on perform-ance-related fees, suggesting an appetite for absolute returns.”

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