Passive Fund of Funds Cheapest But Not Best Performing

Morningstar research has looked at the price difference between fund of funds and found that passive portfolios are cheapest but not the best performing

Randal Goldsmith 18 December, 2017 | 10:30AM
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Multimanager funds invest in other funds to achieve their overall asset-allocation mix and can be either fettered – able to invest only with in-house managers, or unrestricted – can invest with any manager across the market.

Funds of passive funds had the lowest fees at 0.37%

With unrestricted fund selection choices, they should be able to deliver better returns for investors. However, investments in external managers also bring extra costs that need to be covered before there is a net benefit to investors.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
BMO MM Navigator Cautious C Inc76.38 GBP0.22Rating
Premier Miton Multi-Asset Dist C acc391.20 GBP0.15Rating
Premier Miton Multi-Asset Mly Inc C acc212.90 GBP0.14Rating

About Author

Randal Goldsmith  is a Manager Research Analyst with Morningstar.