The hidden cost of active management

Cris Sholto Heaton uncovers some of the charges that may be lurking in the small print of your actively-managed fund.

Most investors are aware that a fund's annual management charge (AMC) doesn't include all of its costs. Other expenses, such as administration costs, custodial fees for holding the fund's investments and legal and audit fees, are usually levied on top of the AMC.

For an actively managed fund, this can easily add another 0.15-0.25 percentage points to their expenses.

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Cris Sholto Heaton

Cris Sholto Heaton is an investment analyst and writer who has been contributing to MoneyWeek since 2006 and was managing editor of the magazine between 2016 and 2018. He is especially interested in international investing, believing many investors still focus too much on their home markets and that it pays to take advantage of all the opportunities the world offers. He often writes about Asian equities, international income and global asset allocation.

Cris began his career in financial services consultancy at PwC and Lane Clark & Peacock, before an abrupt change of direction into oil, gas and energy at Petroleum Economist and Platts and subsequently into investment research and writing. In addition to his articles for MoneyWeek, he also works with a number of asset managers, consultancies and financial information providers.

He holds the Chartered Financial Analyst designation and the Investment Management Certificate, as well as degrees in finance and mathematics. He has also studied acting, film-making and photography, and strongly suspects that an awareness of what makes a compelling story is just as important for understanding markets as any amount of qualifications.