Danish bankers push fund fees transparency from 2013

New voluntary rules adopted by the Danish Bankers Association, Consumer’s Council and Danish Shareholders Association should provide more transparency on total expense ratios and other costs starting in 2013.

The rules prescribe an “ÅOP”, equivalent to annual percentage rate: it consists of the TER plus the the funds trading cost plus the sum of maximum issues and redemptions fees that are depreciated over an investor holding period of seven years, according to figures provided by InvesteringsForeningsRådet (IFR, The Federation of Danish Investment Associations).

“It is self regulation based on a separate agreement between the Danish Bankers Association, the Consumer’s Council and the Danish Shareholders Association,” IFR managing director, Jens Jørgen Holm Møller stated.

He added that the change was a big step forward for the roughtly 810,000 members of Danish Investment Associations, the key method by which local investors engage in collective investments.

However, there is a limit to what the new rules can accomplish. Møller said: “The rules cover funds distributed by Danish banks but only if they are manufactured by Danish fund companies. We don’t know whether or how fast the rules will be extended to foreign funds – but we think that it is in the investors’ interest if both Danish and foreign funds marketed to Danish investors by the banks are covered by the rules.”

IFR publishes ÅOP figures against funds on its website. The example below includes Danish equity funds, ranked from most costly to cheapest and including a mean.

Fund “ÅOP”
Fundamental Invest, Stock Pick 5.17
Dexia Invest Fokus Danske Aktier 3.48
Dexia Invest Danske Small Cap aktier 2.77
Handelsinvest Danmark 2.62
Placeringsforeningen Nykredit Invest Danske Fokusaktier 2.35
Danske Invest Danmark Small Cap 2.30
BankInvest Danmark 2.22
Nordea Invest Special Danske Aktier fokus 2.18
Gudme Raaschou Danske Aktier 2.09
SEBinvest Danske Aktier 2.09
Carnegie WorldWide/Danske Aktier 2.04
Alfred Berg Invest Sektorallokering Danmark 1.97
Danske Invest Danmark Fokus 1.91
Sparinvest Danske Aktier 1.86
Nykredit Invest Danske aktier 1.83
BLS Invest Danske Aktier 1.73
Jyske Invest Danske Aktier 1.73
Lån & Spar Invest Danmark 1.67
Danske Invest Danmark 1.57
Nordea Invest Danske aktier 1.55
Alfred Berg Invest Danske Indeks 1.54
Maj Invest Danske Aktier 1.47
Nordea Invest Danmark 1.37
Sydinvest Danmark 1.32
Nordea Invest Portefølje Danmark 1.15
LPI Akt Danmark II (Ak. Forv, OMXCCAPGI) 0.92
Danske Invest Danmark Indeks 0.85
LPI Akt Danmark (Indeksp.følje, OMXC20) 0.63
Mean 1.85

Source: IFR, data to 8 May 2012


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