Date: 20th June 2019

New research by BETTER FINANCE on the Correlation between Costs and Performance of EU Retail Equity Funds without a doubt establishes a negative correlation between returns and fees

Brussels, 20 June 2019 - Common knowledge has it that if you want to beat the market, you need to turn to highly active management … at a price.

As part of its #FundResearch series, BETTER FINANCE decided to put this notion to the test and take a closer look at the main factors impacting fund performance and the ability to deliver above-market returns, with a special focus on costs.

BETTER FINANCE measured the performance over the last ten years of EU equity retail funds from Belgium, France and Luxembourg in comparison with their benchmarks and found that only 27% of surviving funds with a sufficiently long track record managed to overperform the market over 5-year rolling quarterly periods. This confirms that few active fund managers are able to offset the impact of the fees they charge and that it is mostly up to luck whether an investment will beat the market.