Fund Management Fees Rise 10% In One Year!

by Carla Johnson, Investors Offshore.com

04 September 2001

A report from fund research company, Fitzrovia International, has discovered that the number of funds with increasing management fees made a dramatic leap in 2000 compared to the year before.

During 2000, Fitzrovia found that in all funds monitored where there was a change in the annual management charge, the average increase was a colossal 10 per cent, compared with an increase of only 1 per cent in 1999. 'Annual charges for funds that are growing should be falling, not rising, as these funds benefit from economies of scale that could be passed onto investors,' remarked Fitzrovia Chief Executive, Paul Moulton.

Following this overview, Fitzrovia's research then studied 'offshore' fund domiciles, where in the latest quarterly fund charges analysis total net assets topped US$ 1 trillion (£711 billion) for the first time with over 10,250 funds.

For offshore funds investing across a comparable range of 'mainstream' investment areas (US, Global, Europe, Japan or Far East), Fitzrovia states that the average actively managed equity fund has total annual charges of 1.94%, compared with a quoted management fee of 1.25%. And the average bond fund has total annual charges of 1.26% compared with a quoted management fee of 0.77%.

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