Unit trust managers cost savers £1.7bn

Friday, 02 April 2004 12:00

According to a new survey, unit trust managers are costing savers around £1.7 billion a year through share dealing.

The study by consultancy firm Fitzrovia International analysed the dealing costs of nearly 1,000 UK-listed funds, The Times reports.

These trading expenses have been branded an "unnecessary tax on investors" by the man behind the Government's review of institutional investment, Paul Myners.

Mr Myners yesterday questioned the value of share trading: "There is little reason to believe that, on average, fund managers add value.

"About 70 per cent of equity unit trusts would have produced better returns if the managers had left their portfolios completely unchanged for three years."

Share dealing costs come on top of the management fees charged by funds, which means that total expense paid by investors is closer to 2.3 per cent rather than the average 1.5 per cent. Savers are therefore burdened with total management costs in the region of £5.6 billion.

• Tags:
• news