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    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.

    Answered by

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    Important stuffHolly and the team have worked in the finance industry for many years but we are not regulated to give you personal financial advice. For every story on this website about a good investment, or something which went up by 10% or made someone £200, we could also share a story about a bad investment, something which fell in value or lost someone £200. We aim to provide general information and pointers – and btw we are totally agnostic about which providers you might pick – but if you have complex affairs, want personalised advice or need specific recommendations, please look at advice pages and see if regulated digital or traditional financial advice would be the best solution for your needs. Boring Money Ltd is a limited company registered in England and Wales under registration number 09459832 and we have our registered office at 10 Lower Thames Street, London, England, EC3R 6AF.
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    Boring Money Ltd is a limited company registered in England and Wales under registration number 09459832 and we have our registered office at 10 Lower Thames Street, London, England, EC3R 6AF.
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