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UK Investors are pushed high fee funds.
Old 09-17-2013, 06:30 AM   #1
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UK Investors are pushed high fee funds.

Here are the "top" 150 funds recommended by Hargreaves and Lansdown, one of the UK's largest online brokers. As you can see by the Total Expense Ratios (TER) I'm sure H&L likes them too. Many index funds from companies like Vanguard UK are available if you do some digging, but the don't get promoted.

Wealth 150 | Favourite funds for investment | Hargreaves Lansdown
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Old 09-17-2013, 07:05 AM   #2
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Those are some pretty pricey funds. Bond funds with front loads and 1% expense ratios aren't going to have much left over for the investors.
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Old 09-17-2013, 07:17 AM   #3
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Those are some pretty pricey funds. Bond funds with front loads and 1% expense ratios aren't going to have much left over for the investors.
Yep, that's what I thought too. These are the "Wealth 150" and are the best funds in each sector according to H&L...
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Old 09-17-2013, 07:18 AM   #4
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Compared to the c$#p that gets offered by banks and financial planners out here in Hong Kong, those look like excellent low cost options.

When I first started looking for funds in the mid 1990s, I was offered funds with 5-5.5% front end loads and had to go and work out the TER myself (they only disclosed the management fee and the custodian or trustee fee). Things have got better since then but the only retail products with TERs below 1% that I have found are a limited range of ETFs (some of which are synthetic). And the fund mangers complain about the low penetration rate
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Old 09-17-2013, 08:54 AM   #5
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It's often enlightening to compare services in different countries. The UK hasn't had a Bogle to shake up the mutual fund industry so it's still run by people who put fees and commissions ahead of investor return. Also there isn't a large and knowledgeable investing community like there is in the US to lobby for better service. There are low cost index funds available, but I've yet to see a UK equivalent of a Bogleheads group or any serious group of regular investors putting pressure on the brokerages.
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Old 09-17-2013, 08:57 AM   #6
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Canadian investors are paying some of the highest mutual fund fees in the world. In 2011, the weighted average was 1.93%. This report shows where the money is going, makes international comparisons, and recommendations.

http://www.osc.gov.on.ca/documents/e...-fund-fees.pdf

In my experience, 10-20 years ago most Canadians had no idea of the impact that fees have on a portfolio. But they are beginning to wise up.

Banks misleading clients on mutual funds - Canada - CBC News

Of course I left mutual funds a longtime ago.
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Old 09-17-2013, 11:58 AM   #7
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There are low cost index funds available, but I've yet to see a UK equivalent of a Bogleheads group or any serious group of regular investors putting pressure on the brokerages.
True. The Monevator blog in the UK linked to occasionally by Mike Piper (Oblivious Investor) is the only UK 'group' I can think of. I'm not sure that they're applying any political pressure on anyone, merely seeking to follow 'Boglehead' style principles of low cost and indexing.
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Old 09-17-2013, 01:22 PM   #8
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True. The Monevator blog in the UK linked to occasionally by Mike Piper (Oblivious Investor) is the only UK 'group' I can think of. I'm not sure that they're applying any political pressure on anyone, merely seeking to follow 'Boglehead' style principles of low cost and indexing.
The UK investing public are pretty much sheep. Most will save in an ISA or pension plan, but have little knowledge of expenses or the funds they own. I suppose that goes for many US investors too, but it seems worse in the UK.

Having lived in the US for all my working life it's a little frightening to look at the UK investing landscape as I plan to retire back there. But the high fees etc probably won't affect me as I'll continue to invest through Vanguard in the US and I won't be subject to the UK's pension rules and annuity rip offs.
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