Danish regulator sparks active share debate

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The Danish Investment Fund Association (IFB) has responded to comments on active share and tracking error contained in the latest annual report from the Danish FSA, which includes analysis from the regulator on the degree to which actively managed funds may actually be considered ‘passive’ in light of their performance versus benchmark indices.

According to the Danish FSA report, up to “three in 10” actively managed funds are charging active fees even though they are effectively behaving as passively managed funds, IFB states.

Jens Jørgen Holm Møller (pictured), chief executive, said: “At IFB we wonder about Finanstilsynet’s conclusion. On the basis of two key numbers – and without speaking to the fund – one cannot conclude that every third fund would cheat. There can be many and good reasons why the figures are what they are. In a small market such as the Danish one…it can for example be difficult to invest a long way off the index, but that does not mean that the fund is investing passively.”

“Our view is clear: we are in favour of clear labelling. And a fund that is being marketed as active should of course be active. But this area is highly complex. Therefore it is unfortunate that on the basis of two simple key figures questions are being asked about the quality of the industry’s products. But the work is not yet complete… we want to enter dialogue with Finanstilsynet about the analysis.”




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