High investment fund fees can really cost you

The European fund management industry is still charging customers a fortune. Here’s how to avoid big fund fees.

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Fund managers want to smash your piggy bank

We like to remind our readers that costs matter. You can't predict the return you'll make, or be sure of how the economic backdrop will affect your investments. But you can control what you pay to invest and every penny saved on costs is an extra penny compounding away in your retirement account. This week, another report arrived to hammer the point home. The European Securities and Markets Authority (ESMA) published its first annual report into the cost and performance of "retail investment products" (investment funds, in other words). ESMA, which is a European Union (EU) financial watchdog, looked at the performance of both active and passive funds across various EU states from 2008 to 2017.

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.