Retail investors face larger volatility in fund fees than institutional peers
Over the last 12 months, 17% of all share classes have changed their OCF.
According to the analysis, the level of ongoing charges figures (OCF) for retail share classes are often more volatile than institutional and unbundled, or ‘clean' share classes.
Over the last twelve months, 17% of 40,000 share classes in Fitz's database experienced a change in their OCF. Among the share classes that experienced a change, 35% saw an increase in fees.
The two largest asset classes with changes in their OCFs were equity and bonds, with 30% of both equity and bonds funds share classes with a change in fees showing an increase.
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Retail share classes for bond funds showed wider average changes, ranging between a 12bps drop and a 7bps rise. By contrast, other share classes saw their OCFs change between an 8bps drop and 6bps rise.
Hugues Gillibert, CEO of Fitz Partners, said: «While fees are still going down overall, it is interesting to note that our research shows institutional share classes, which would be the most competitive when it comes to pricing, having the largest proportionate increase in equity funds OCFs at 9%.
»This could highlight the inflationary pressures that asset managers and service providers alike have been facing, thus forcing them to pass these costs onto the investors through increasing fund fees, thereby increasing OCF levels although.
«More strikingly, fees for any share class types across equity or bond funds still show higher reductions than increases, which would be a relief for investors.»
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