RAPID RESPONSES
Fair play on funds
Regarding the True & Fair campaign [Join our campaign to fight fund managers’ high fees and lack of transparency, last Wednesday].
I’m all in favour of lower fees and more disclosure on costs. When choosing pension funds at the moment investors are told how much future income would be provided under various return assumptions, and it would be fairly straightforward to change the law so that the forecast cumulative costs of trading and fees also have to be disclosed for a given fund mix. I’m sure many investors would be shocked at the difference in terminal value when choosing a fund with a 0.3 per cent fee instead of a 1.25 per cent.
However, I have to disagree with encouraging disclosure on how funds are invested. Having this information available daily, for free, and on the internet is placing a value of zero on the intellectual property of fund managers. They can’t be expected to spend a lot of money finding the best investments and then publish that information gratis. This would encourage cheap replication of active funds, and hurt those managers who actually add value.
Aram Compton
Email theforum@cityam.com with your comments.