Business
Morningstar Publishes Global Study of Fees and Expenses in the Fund Industry, Finds Fees Continue to Fall, Yet Room for Improvement in Industry Structure Remains
Australia, the Netherlands, and the United States again earned Top grades in the first chapter of the Global Investor Experience Study; Italy and Taiwan
About this update from Morningstar, Inc.
[{"type":"text","content":"Australia, the Netherlands, and the United States again earned Top grades in the first chapter of the Global Investor Experience Study; Italy and Taiwan received Bottom grades once more \nCHICAGO, March 30, 2022 /PRNewswire/ -- Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, today published the first chapter, \"Fees and Expenses,\" of its biannual Global Investor Experience (GIE) report. The report, now in its seventh edition, assesses the experiences of mutual fund investors in 26 markets across North America, Europe, Asia, and Africa. The \"Fees and Expenses\" chapter evaluates an investor's ongoing cost to own mutual funds compared to investors across the globe. \nMorningstar's manager research team uses a grading scale of Top, Above Average, Average, Below Average, and Bottom to assign a grade to each market. Morningstar gave Top grades to Australia, the Netherlands, and the United States, denoting these as the most investor-friendly markets in terms of fees and expenses. Conversely, Morningstar again assigned Bottom grades to Italy and Taiwan indicating these fund markets have amongst the highest fees and expenses. \n\"The good news for global fund investors is that in many markets, fees are falling, driven by a combination of asset flows to cheaper funds and the repricing of existing investments,\" said Grant Kennaway, head of manager selection at Morningstar and a co-author of the study. \"The increased prevalence of unbundled fund fees enables transparency and empowers investor success. However, the global fund industry structure perpetuates the use of upfront fees and the high prevalence of embedded ongoing commissions across 18 European and Asian markets can lead to a lack of clarity for investors. We believe this can create misaligned incentives that benefit distributors, notably banks, more than investors.\" \n\nThe first chapter on \"Fees and Expenses\" is available here. Highlights include: \nThe majority of the 26 markets studied saw the asset-weighted median expense ratios for domestic and available-for-sale funds fall since the 2019 study. For domestically domiciled funds, the trend was most notable in allocation and equity funds, with 17 markets in each category reporting reduced fees.Lower asset-weighted median fees are driven by a combination of asset flows to cheaper ...