U.K. Watchdog to Probe Lagging Fund Managers and Name Them
The U.K. financial watchdog says it plans to scrutinize underperforming actively managed funds, in another swipe at an industry under pressure.
The Financial Conduct Authority will release the results of its findings in its 2019-20 annual report, according to its business plan on Wednesday. They will publish results of long-term underperforming funds, after fees, to show if they’re giving value to investors.
The FCA also plans to release data on the after-fee performance of U.K.-based index tracker funds that follow certain popular indexes.
Active management has been coming under pressure for years from greater competition from cheaper passive funds and increasing costs from new regulation, in an environment of low interest rates that have weighed on returns. Investors are voting with their feet, pulling a reported $100 billion from European open-ended funds in the fourth quarter, according to Amundi SA estimates.
©2019 Bloomberg L.P.