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Investment Costs and Performance

Empirical evidence of UK fund industry delivery

The Investment Association has published a new research paper looking at fund management charges, transaction costs and performance. The analysis is based on a dataset by Fitz Partners covering 1,350 fund accounts across 16 IA equity sectors between July 2012 and May 2015.

We find that across IA equity sectors:

  • In many cases, funds delivered better returns than the benchmark.
  • The added value was net of both ongoing charges and transaction costs.
  • Asset-weighted average portfolio turnover was around 40%.
  • Asset-weighted average transaction costs were approximately 17 basis points.

Overall, our results indicate that there is no excessive trading nor hidden costs damaging investor returns. On the contrary, we find that the UK fund management industry has delivered strong investment returns in recent years.

Read the full paper here.

Fact check: Further detail on fund costs and performance research

Read the press release here.