BETTER FINANCE repeatedly denounced the practice of Closet Indexing and in October 2014 lodged a request with the European Securities and Markets Authority (ESMA) for “closet indexing” to be investigated on a pan-European basis. Nearly a year and a half later, on February 2nd 2016, ESMA published a statement providing details of its work on potentially falsely active funds and released some of the long-awaited results of its investigation.

These results confirmed that investor detriment is possibly very serious since ESMA found that up to 188 funds – i.e. 15 % of the UCITs funds it analysed – could potentially be falsely active based on quantitative measures available, a number that could have been much higher had ESMA included all UCITS equity funds and all other equity funds that are widely sold to retail investors such as alternative Investment funds (AIFs).

However, ESMA never disclosed the funds that were uncovered by its investigation as potentially falsely active, nor did it disclose in which countries they are domiciled, leaving EU investors in the dark.

This is why BETTER FINANCE decided to replicate the ESMA study as closely as possible and – based on the same quantitative analysis performed by ESMA – to disclose the list of the UCITS equity funds, including those that are potentially “closet indexers” according to the ESMA methodology, but also those that ESMA excluded from its analysis.

Check the results on!