Beware hidden fund costs1st February 2018

Over the years there have been various campaigns that have urged fund managers to spell out their costs in full.

 The snappily titled Markets in Financial Instruments Directive 2 (Mifid 2) legislation is the latest industry effort to ensure this happens.

One of the perennial gripes has been with hard to pin down ongoing charges (transaction fees associated with buying and selling individual fund holdings) which, when excluded, don’t properly reflect  the total costs incurred by investors.

For the first time funds now have to publish trading costs and research by the Lang Cat show that for some of the best selling funds ongoing costs are up to thirty percent higher than the headline charge.