My comment in the Sunday Business Post today looks at the subject of mirror funds.
We simply asked the question; "what if you compare the performance of an Irish Fund with that of an identical version of the same fund available in another jurisdiction such as Luxembourg?"
The answer was surprising!
We found that Insurance Companies in Ireland were providing investors with returns up to 3.47%pa less than the identical Euro share class of a fund from the same insurance company offered through it's Luxembourg operation.
In one instance we examined a fund with a Total expense ratio of over 2% meaning that the total implied cost of investing in Ireland was around 5.8%pa.
We found under performance of Irish unit linked funds compared to the international version of the same investment ranging from 0.77%pa to 3.47%pa
The message for investors is clear, don't assume that the stated annual management charge is the real cost of investing
We simply asked the question; "what if you compare the performance of an Irish Fund with that of an identical version of the same fund available in another jurisdiction such as Luxembourg?"
The answer was surprising!
We found that Insurance Companies in Ireland were providing investors with returns up to 3.47%pa less than the identical Euro share class of a fund from the same insurance company offered through it's Luxembourg operation.
In one instance we examined a fund with a Total expense ratio of over 2% meaning that the total implied cost of investing in Ireland was around 5.8%pa.
We found under performance of Irish unit linked funds compared to the international version of the same investment ranging from 0.77%pa to 3.47%pa
The message for investors is clear, don't assume that the stated annual management charge is the real cost of investing