Funds in Belgium and Germany have the lowest annual charges – as measured by total expense ratios – while Italy and Spain have the highest, according to new research by European fund information firm Fitzrovia International, in London.
Fitzrovia studied 30,800 funds and share classes in 11 European countries, using total expense ratios as a basis for calculating average fund charges.
Total expense ratios are calculated using publicly available information contained in a fund’s report and accounts, which Fitzrovia says represents a “true and fair representation of the fund’s activity, regardless of domicile”.
The funds surveyed accounted for around e4.2trn of net assets or around 95% of the collective fund assets in the 20 countries that are members of European funds and investment companies body FEFSI.
It says total expense ratios are a much more accurate guide to annual operating costs than the more widely quoted annual management charge.
“Our work shows there are clear differences in attitudes to fund costs across Europe, however within individual markets the primary driver behind each fund’s level of charges is the fund promoter’s own policy on fund pricing and competitive price,” says Fitzrovia’s chief executive Paul Moulton.
In terms of actively managed equity funds, Fitzrovia found that Belgian-domiciled funds had the lowest total expense ratio, of 0.93% on a weighted average basis, with Spain the highest at 2.12%.
For bond funds, Austria was cheapest at 0.51% with Spain again the priciest at 1.47%.
Index tracking funds saw Germany the cheapest at 0.59%, with Italy the highest at 2.19%.