Date: 5th October 2016
Author:
Type: In the news
"It is mis-selling if a manager is perfectly conscious of replicating the index and then selling it to an investor as an active fund". This was how Juan Manuel Viver, Policy Officer at BETTER FINANCE, described "index huggers".
Across Europe, investment funds are now being investigated for charging a higher fee for taking a more active role in stock selection, but which in reality have mirrored the holdings of the stock index to which their performance is measured.
Swedish, Danish and Dutch watchdogs launched probes over the last six months. However, European financial regulators may face difficulties in proving the financial industry mis-sold a breed of high-fee investment funds.
Please find Reuters' here.