The ongoing annual fees charged to investors in Austrian investment funds, stand on average at 1.15% of fund assets. The maximum entry charges that are charged when purchasing units in funds, stand on average at 3.66%. These were the findings of the market study conducted by the Austrian Financial Market Authority (FMA) about a total of 1,134 Austrian public funds, representing total managed funds assets of € 96.4 billion as of 31.12.2017. The fees vary considerably, depending on the investment strategy and the risk strategy of the funds. All Austrian public funds were examined – i.e. investment funds that may be distributed to the broad public spectrum of investors.
“This FMA market study, which will appear and be published annually in this form in the future, contributes to the transparency of the funds market. It places investors in a better position for comparing and assessing fees for funds on the market,” remarked the FMA’s Executive Board, Helmut Ettl and Klaus Kumpfmüller. “It allows investors to see at a glance, how high the fees charged for the funds they hold are in comparison with the market average.”
As of 31.12.2017 the annual ongoing charges stood on average at 1.15 % weighted by volume, with a maximum amount of 4.3 %. The maximum entry charge across all public funds was 3.66 % on average weighted by volume, although there was a case of up to 10 %. The charges in 2017 were therefore 1.37% and 3.71% lower compared with the preceding year. Money market funds and short-term bond funds have the lowest charges by investment strategy, followed by bond funds, real estate fund, mixed funds and equity funds. This applies both in terms of ongoing charges as well as the maximum entry charge. Bond funds were cheaper than equity funds both in terms of ongoing charges (0.70 % cf. 1.76 %) and max. entry charges (3.42 % cf. 4.39 %). The ongoing charges passed on by Austrian funds are in the mid-range in comparison to Europe as a whole.
Furthermore it is also apparent that the charges tend to increase depending on the risk classification of the fund (measured in terms of the Synthetic Risk and Reward Indicator (SRRI)). While the ongoing charges are on average 0.82 % for the lowest risk class (1), in the highest risk class (7) they stand at 1.87 %.
The fees charged by public funds – along with their objectives and investment policy as well as their risk/performance profile – must be stated in the legally prescribed Key Investor Information Document (KID).
The full market study make be found on the FMA website (in German only) at: https://www.fma.gv.at/en/fma-thematic-focuses/fma-focus-on-fees-charged-by-funds/
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