FT Investments – Lipper critical of surfeit of funds

Investors’ interests are being “jeopardised” by the European fund industry’s desire to continually push new products, according to a report from Lipper FMI.

Lipper found that new funds continued to see net inflows of more than €120bn £105bn, $170bn in 2008, even as pre-existing “backlist” funds haemorrhaged €520bn.

But the sheer proliferation of funds that inevitably results from this imbalance appears to be detrimental to investors. Europe’s fund count of 35,000 is continuing to balloon; over the past six years twice as many funds have launched than closed. In contrast the US, with a similar size asset base, has just 8,000 funds; a tally that is falling with closures and mergers running at twice the level of launches.

As a result Europe has one fund for every 1,000 investors, Lipper estimated, with the median fund size just €25m. This is costly for investors with the total expense ratio, typically 1.6 per cent for larger funds, approaching 3 per cent for the smallest vehicles.

“The key criticisms of launching too many new funds are, first, that it increases the chances for mutual funds to be sold on the basis of what is fashionable, rather than what is most appropriate for an investor, which may lead to misselling,” said Ed Moisson, head of consulting at Lipper FMI.

via FT.com / FTfm / Investments – Lipper critical of surfeit of funds.


About zyakaira

Investment Banker, 40s, Bangalore This Biopic and this web recreates how one point of view, one person can impact a tremendous economic engine that the world thrives and mis-thrives on. This one has the knowledge and the civil sense , the art of conversation and some good writing to mentor others as powerful and help global managers develop and fine tune their approach on US markets, China, India and the world. Read on here, and let me know what you need. It can be a race for TRPs, a race for new markets and a race to do what is right. I have the pulse of the crisis, the recovery and the market direction and can help you build and refine your strategy as i have helped thousands of managers and multiple global corporations. Of course, it’s more fun if you talk to me. I am in favor of leading this moving of the economic crisis and will partner with you in a soft and subtle way, just the way we both ride to the top. But you can write with us, opine and just reply with aplomb and shine on Twitter , 4 square , Facebook and any other social “choupal” of choice via zyaadakairaada Profile & Portfolio - SocialPicks Different flavours at: http://benchilibowl.wordpress.com http://zyaada.mp

Posted on June 7, 2009, in Financial Markets, GDOW, Global, Investments, TARP, US and tagged , , , , , , , . Bookmark the permalink. 2 Comments.

  1. If you wanted restructuring themes, then you could go for a sector specific surge in resusitation like American retail..

  2. If you wanted restructuring themes, then you could go for a sector specific surge in resuscitation like American retail..here

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