You are here: Home - Investing -

New rules threaten low-cost fund charges

Written by:
Charges on exchange traded funds (ETFs) and other low-cost products could rise following the introduction of new European rules, according to a report in the Financial Times.
New rules threaten low-cost fund charges

The European Securities Markets Authority (ESMA) has proposed that profits made by fund managers who lend out stocks should be returned to investors.

This could affect charges as, currently, fund managers can use the income they receive from loaning stock to keep annual management fees low.

The FT quoted Peter de Proft, director general of European Fund and Asset Management Association, as saying: “If you take away the revenue from stock lending then the cost of running the funds will go up and someone is going to have to pay that cost.”

However, Alan Miller, co-founder of SCM Private, said fee increases were “extremely unlikely”.

“Any company increasing its fees would lose share of the market, therefore any extra revenues from higher fees would be more than offset by lower fund sales,” he told the FT.


Tag Box




Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
Barclays to overhaul bonus model – reports

Barclays Bank is considering a new remuneration process which would see bonuses for its top executives reduced and payment deferred...