Passive funds consistently outperform active net of costs — ESMA

Posted by Robin Powell on January 11, 2019

Passive funds consistently outperform active net of costs — ESMA


Investment costs costs represent “a significant drain on fund performance”, which impacts retail investors “to a much higher extent” than their institutional counterparts.

That’s one of the key findings of a new report from ESMA, the European Securities and Markets Authority.

In its first Annual Statistical Report, ESMA also states that, net of costs, passive equity funds “consistently” outperform their actively managed counterparts.

Commenting on the findings, ESMA chairman Steven Maijoor said: ”Retail investors in the EU benefit from the choice among thousands of UCITS and alternative funds and structured investment products. It is key that they are aware of the costs and performance of these products.

“Our report shows that fund costs are substantive, can severely impact returns, and vary strongly. It demonstrates the importance of cost disclosure to investors.”


You can read the full report here:

Annual Statistical Report on the cost and performance of retail investment products


Related posts:

Europe’s sustainable funds universe continues to grow

Active versus passive in Europe is no contest

Europe’s low cost investing revolution is gathering momentum

What would Brexit mean for UK investors?


You can also find the latest SPIVA scorecard for Europe on The Evidence-Based Investor’s resources page:

SPIVA scorecards

Robin Powell

Robin is a journalist and campaigner for positive change in global investing. He runs Regis Media, a niche provider of content marketing for financial advice firms with an evidence-based investment philosophy. He also works as a consultant to other disruptive firms in the investing sector.


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