ESMA Report Stresses Impact of Costs on Retail Investor Benefits
The European Securities and Markets Authority (ESMA), the EU securities regulator, yesterday published its second annual statistical report on the cost and performance of retail investment products in the European Union (EU.)
The analysis contained in this report complements ESMA’s risk assessment and supervisory convergence work within its investor protection mandate, and contributes to the European Commission’s project on cost and performance of investment products under the Capital Markets Union Action Plan.
Steven Maijoor, Chair, yesterday said:
“In this second annual report we continue to see the high impact of costs on the final returns that retail investors receive on their UCITS investments. The costs paid by retail investors are significantly higher than those paid by institutional investors, leading to lower net returns for this category of investors.
“The report also finds that, in the analysed period, due to the higher costs, the net returns on actively managed funds are lower, on average, than those for passively managed funds.
“Today’s report highlights the continued need for retail investors to be provided with clear information about the impact of costs on the returns they can expect to receive, allowing them to make informed investment decisions. This forms a key element of meeting ESMA’s investor protection objective.”
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