In an article published in the Financial Times, Madison Marriage reveals the names of 3 fund managers who have changed their fund documents after being accused of flouting EU rules that require fund managers to tell clients how they performed against their chosen benchmarks.
EU law provides that funds that have a benchmark must disclose this in their key investor information documents ( KIIDs) and display the performance of their benchmark. Consumers associations and regulators are concerned that retail investors struggle to assess whether they are getting a good deal due to confusing marketing materials that contain unclear objectives. They are also concerned that European investors might have invested in closet- tracking funds.
BETTER FINANCE estimates that dozens of funds registered in Luxembourg do not disclose their benchmark performance.
Guillaume Prache, managing director of BETTER FINANCE declared that the fact that so many funds failed to disclose this information " highlights the poor enforcement of investor protection rules in the EU".
Read the full article in Financial Times here.