Six consecutive years of accumulating more withdrawals than contributions, assets under management at 1996 levels and a 8% drop in fund participation in the last year alone to the point that for the first time since 2005, fewer than 5 million people are enrolled in savings plans. These figures are far from ideal for the savings fund industry, but they are what investment funds are facing right now. With the yield war last and behind them (in the past several months they have not counted on support from fixed income or equities), Spanish fund managers could resort to a price war in order to revive their business. But they won't.
According to figures published yesterday by the Association of Institutional Investors and Investments and Pension Funds (Inverco following the Spanish abbreviation), the average management commission applied to investment funds (not including treasuries) is now 0.96%. If this figure is indeed beneath the 1.27% average seen across the rest of Europe, it means that fund fees have risen 5% since 2010. According to the CNMV they were 0.91% at that time.
By category, the largest increases were seen in fixed income, which ended up being one of 2011?s best strategies despite funds having to face an unprecedented debt crisis that is still dragging on today. In 2010 investors paid management commissions on fixed income funds rose to 0.65%, and now they have increased to 0.67%. Management fees are higher for equities funds, which did not have a banner year, considering that half of them dropped by 13%. Equities fees are between 1.81% and 1.82% and, unlike what is happening in fixed income where despite increases manager fees continue to be the lowest across Europe, they are charging investors more than what other European funds are charging. The average fee is in Spain is 1.47%.
