Are fees too high?

fees/VanEck/active-managers/Smart-beta/australian-equities/russel-chesler/

31 May 2019
| By Oksana Patron |
image
image image
expand image

The majority of Australian active managers might be charging fees that are too high and smart beta investments strategies will continue to disrupt the active management, according to VanEck’s analysis.

The report, entitled “When are fees too high? The potential impact of smart beta to disrupt active Australian equity strategies”, claimed that most Australian equity funds should be charging between 0.35 per cent and 0.65 per cent per annum, as most of their performance could be explained by factors which were also used in smart beta strategies.

“Only those active managers who can demonstrate identifiable and persistent ‘real alpha’ will prevail,” Russel Chesler, VanEck’s director – investments, said.

“Australian equity managers that continue to offer benchmark-like performance for high fees face some hard decisions. They must evolve to survive.”

According to Chesler, active managers needed to better differentiate themselves and provide what smart beta could not.

“Of this differentiation can’t be achieved, the investors will continue to question the fees they are being charged,” he concluded.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

5 months ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

5 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

7 months 1 week ago

The FSCP has issued a written direction to an adviser who charged clients “extraordinary fees” for inappropriate and conflicted advice, as well as encouraged them to swit...

1 week 5 days ago

ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager. ...

3 weeks 1 day ago

ASIC has confirmed the industry funding levy for the 2024–25 financial year, and how much licensees can expect to pay....

2 days 16 hours ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
2
DomaCom DFS Mortgage
95.46 3 y p.a(%)
5