How much better does a managed fund have to do in a year to cover the extra cost of the fees compared to a tracker fund?
04 April 2023
Question by Anonymous
How much better does a managed fund have to do in a year to cover the extra cost of the fees compared to a tracker fund?
Answered by Boring Money
As quoted in our 'Money Clinic with Bestinvest' webinar:
The average tracker fund will cost about 0.1% a year if it’s just tracking one index. If it’s a blend of lots of different regions and investment types (known as a multi-asset fund) then this will cost nearer 0.25%.
If you are looking at a single investment type like UK shares for example, the passive fund would cost around 0.1% and an active fund would cost about 0.75%. So the active fund has to deliver 0.65%+ more in order to wash its face.
