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Hidden Fund Fees Mean U.K. Investors Pay Double US Rates
Another writer not clear about the statistics. The survey cited reports that total expense ratio for US equity funds vs. UK equity funds is 1.11% vs. 1.18%, not the 1.53% vs. 2.48% stated in the article.
The article says that these figures are what equity funds typically cost. In fact, these are not the "typical" fees (which I would interpret as median), but dollar-weighted. More importantly, these are total carrying costs including loads (which for the purpose of the study are amortized equally over five years), not what one would think of as "fund costs". All of this can be seen in table 2 of the study, where TER is the "total expense ratio" (what I quoted in my introductory paragraph), and TSC is "total shareholder costs" including loads that go not to the fund but to the broker.
The fact that TERs are nearly identical and TSCs are wildly different goes to the distribution system, and not the cost of the funds.
Comments
The article says that these figures are what equity funds typically cost. In fact, these are not the "typical" fees (which I would interpret as median), but dollar-weighted. More importantly, these are total carrying costs including loads (which for the purpose of the study are amortized equally over five years), not what one would think of as "fund costs". All of this can be seen in table 2 of the study, where TER is the "total expense ratio" (what I quoted in my introductory paragraph), and TSC is "total shareholder costs" including loads that go not to the fund but to the broker.
The fact that TERs are nearly identical and TSCs are wildly different goes to the distribution system, and not the cost of the funds.