Higher fees don’t necessarily mean better performance

Fund charges have gone up astronomically in the last couple of decades. That might be fine if performance had too.

I wrote in one of my editor's letters a few weeks ago about an elderly ex-partner of one of the UK's big investment firms telling me that when he started out, the management fees on the firm's funds were under 0.1%. I was amazed by this. A lot of you were amazed too.

We all noted that back then there would have been other fees involved. Transaction costs would have been very high, and there would have been hefty entrance and exit fees too.

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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.