Pricey tracker fund calls into question M&G’s value for money assessment
Asset manager praised for level of introspection but tracker costs some seven times more than a rival equivalent
Aspects of M&G’s latest value for money assessment have been called into question, after an expert pointed out that the asset manager’s tracker fund costs some seven times more than a rival’s equivalent.
In its second assessment of value (AoV) report M&G admitted 60% of its funds “must improve” their investment performance, however the asset manager said that most of its range offers value for money.
UK Financial Conduct Authority: Fund Managers Falling Short On Assessing The Value Of Their Funds
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FCA finds most fund managers falling short on value assessments
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Weekend Essay: Why fund management is reassuringly expensive
By Justin Cash 5
th March 2021 12:00 pm
“If margin is indicative of exclusivity, fund management is a luxury item.” So wrote investment consultant Graham Bentley in a column for
Money Marketing last week.
The margin taken by managers is a quarter higher than that of high-end fashion brand Louis Vuitton. It even rivals some of Apple’s product lines for profitability – a company known for its tendency to offer a premium price tag knowing that consumers will still circle each new launch like gannets.
The only conclusion, as Bentley rightly notes, is that “fund management is priced as an extravagance”.