With all the recent publicity about active funds being closet trackers, charging active management fees for closet trackers – There are also tracker funds charging active management fees.
If you invest in for example Virgin UK Index Tracker Fund – you will be charged 1.00% per annum in fees. Yet as people trust the fund manager’s name it has over £2.8bn in Assets Under Management.
Virgin’s tracker funds passively invests in the same way as its rivals, but if you had invested £10,000 5 years ago in Virgin funds your investment would be worth £14,730 which is over £1,000 less than most of its rivals
And this money has gone as fees to your trusted asset manager.
You always need to check the fees even for a trusted brand.
FTSE all share 61.5%
Virgin UK FTSE all share tracker 47.3%
F&C FTSE 59.0%
Scottish Widows FTSE 58.5%
Aberdeen FTSE 58.0%
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