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13.02.2017 13:36 Age: 343 days
Category: Press Releases

Better Finance Replicates and Discloses ESMA Findings on Closet Indexing

Better Finance helps investors identify potential falsely active funds (“closet indexers”), and asks regulators to investigate further:   It replicated the ESMA study on closet indexing and identified up to 165 equity “UCITS” funds that could potentially be closet indexers.

Better Finance fully discloses the results of its replication of ESMA’s quantitative study

ESMA would not disclose the names of the funds it identified as “potential equity closet indexing funds” in its investigation results released in February 2016 (see annex 3), leaving fund investors in the dark. This is why Better Finance decided to replicate the ESMA study as closely as possible and – using the same quantitative analysis performed by ESMA - to disclose the list of the sampled funds (attached), including those that are potentially “closet indexers” according to ESMA, and also those funds – more numerous - that ESMA did sample but did not analyse for lack of data. Better Finance used the same source as ESMA (the Morningstar fund database).

Replicating in December 2016 the ESMA study performed in 2015, Better Finance could sample 2,332  UCITS equity funds using ESMA’s sampling criteria (see annex 3 for details).

Better Finance broke them down into four categories:


  • Annexes 2 & 3 in Full Press Release
  • Annex 1.A - List of All Funds (2332 funds)
  • Annex 1.B - List of funds with No Reported Benchmark (147 funds)
  • Annex 1.C - List of funds with Insufficient Data (1172 funds)
  • Annex 1.D - List of funds that are Potential Active Funds (848 funds)
  • Annex 1.E - List of funds that are Potential Closet Indexers (165 funds)

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