17/1/2019 | Press release

German Investment Funds Association BVI welcomes ESMA study on costs and performance of investment funds

The German Investment Funds Association BVI has responded favourably to the latest study by the European Securities and Markets Authority (ESMA) – the Annual Statistical Report on the cost and performance of retail investment products in the European Union. Thomas Richter, Chief Executive Officer of BVI, commented: ‘The study by ESMA proves that investment funds are highly transparent with regard to their cost and performance. It was the availability of extensive data that enabled such a detailed study to be undertaken. It will be a good basis for the planned comparison of investment products across the European Union.’ All that is lacking now, according to Thomas Richter, are studies based on the same methodology covering the costs and performance of competing products, especially investigations by the European Insurance and Occupational Pensions Authority (EIOPA) into capital-forming endowment insurance.

According to the ESMA study, the fees for retail funds in Germany are below or close to the EU average in nearly all investment fund categories. This is consistent with the results of earlier BVI studies on the costs of investment funds. ESMA also analysed the performance of investment funds and found that investors in Germany made average returns of 5.85 percent per annum over ten years (2007 to 2017) on equity funds after deduction of costs. Investors in fixed-income funds generated returns of 3.30 percent per annum.

In October 2017 the EU Commission instructed the European supervisory authorities ESMA, EIOPA and the EBA to undertake an annual study of the costs and performance of investment products for retail investors in order to enable a comparison across the European Union. The assignment was based on one of the objectives of the capital markets union, which was to encourage greater participation by retail investors in the capital markets by increasing transparency on costs and performance.

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