Premier research: UK equity investors risk losses in 'closet trackers'

Some 30% of money held in the IMA's two main UK equity sectors is stuck in closet trackers that are losing investors money, according to new research by Premier Asset Management.

These funds, which hold a total of £58bn in assets, charge active fees, but are performing no better than tracker funds, and therefore often underperforming the latter due to higher fees. Premier has calculated the average weighted annual ongoing charge of these funds is 1.43%, only marginally lower than the 1.55% paid for the market's most expensive funds, but well above the 0.61% charge of the average tracker product. Meanwhile, funds with a highly active share - defined by Premier as funds deviating from the index by 80% or more - have significantly outperformed the market over the...