Is how much money a manager invests in their own fund really that important?

Should fund managers invest their own money in their funds, and let us know how much? They probably should, says Merryn Somerset Webb. But it might not be the most important thing to know.

Fees illustration
What you should really concentrate on is how much the manager charges you
(Image credit: © Getty Images/iStockphoto)

Should all fund managers in the UK invest their own money in their funds? And should they tell us just how much money they have invested? There are good reasons to think they should.

Think about how fund management companies make money: their fees are calculated “ad valorem” – as a percentage of the value of the assets they have under management – and are taken directly from your holdings every year. That means that fund managers’ main interest is not so much good performance, but in growing the assets under management; the more they manage the higher the absolute value of the percentage taken.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.