Norwegian funds among cheapest, VFF notes

VFF, the Norwegian Fund and Asset Management Association, has said that research from Morningstar points to domestic funds being amongst the cheapest in Europe on the basis of annual management fees.

According to the published data, Norwegian funds have averaged an annual cost of 0.65% in 2016, down from 0.71% in 2013.

This puts the country just behind Switzerland and Ireland (both 0.62%). All three are well below the European average of 1%, according to the Morningstar findings.

Norway is Europe’s cheapest country in which to buy bond funds on the basis of the measurement used: funds there averaged an annual cost of 0.26%, about a third of the European average of 0.74%.

Norway also scores well for average management fees applied to passive funds, where its 0.17% cost is only just beaten by Switzerland’s 0.12%. However, VFF notes that while continued downward pressure on passive management fees is affecting both active and passive funds, there are still significant variations in the uptake of passive investment vehicles.

Proportionately, passive funds have a market share of some 26.5%, according to the Morninstar data cited, but this is far less than the 50% cited for the Swiss market – driven by Switzerland’s pensions system, that to a large extent uses cheaper passive vehicles.

The data surrounding Norwegian funds reflects closely developments in the Swedish funds market also. The  same Morningstar report – which looked at fees in some 21 European fund markets – also found that fund investors in Sweden were benefitting from falling costs. However, Statistics Sweden has also found that households reduced their exposure to funds through the second quarter of the year.

Costs fall, but so do household investments in funds – Swedish data

Jonathan Boyd
Editorial Director of Open Door Media Publishing Ltd, and Editor of InvestmentEurope. Jonathan has over two decades of media experience in Japan, Australia, Canada and the UK. Over the past 17 years he has been based in London writing about funds and investments. From editing the newsletter of the Swedish Chamber of Commerce in Japan in the 1990s he now focuses on Nordic markets for InvestmentEurope. Jonathan was awarded Editor of the Year at the Professional Publishers Association (PPA) Independent Publisher Awards 2017. Shortlisted for the same in 2016, he was also shortlisted in 2017 and 2015 for the broader PPA Awards category Editor of the Year (Business Media).

Read more from Jonathan Boyd

Close Window
View the Magazine

I also agree to receive editorial emails from InvestmentEurope
I also agree to receive event communications for InvestmentEurope
I also agree to receive other communications emails from InvestmentEurope
I agree to the terms of service *

You need to fill all required fields!