VFF, the Norwegian Fund and Asset Management Association, has said that research from Morningstar points to domestic funds being amongst the cheapest in Europe on the basis of annual management fees.
According to the published data, Norwegian funds have averaged an annual cost of 0.65% in 2016, down from 0.71% in 2013.
This puts the country just behind Switzerland and Ireland (both 0.62%). All three are well below the European average of 1%, according to the Morningstar findings.
Norway is Europe’s cheapest country in which to buy bond funds on the basis of the measurement used: funds there averaged an annual cost of 0.26%, about a third of the European average of 0.74%.
Norway also scores well for average management fees applied to passive funds, where its 0.17% cost is only just beaten by Switzerland’s 0.12%. However, VFF notes that while continued downward pressure on passive management fees is affecting both active and passive funds, there are still significant variations in the uptake of passive investment vehicles.
Proportionately, passive funds have a market share of some 26.5%, according to the Morninstar data cited, but this is far less than the 50% cited for the Swiss market – driven by Switzerland’s pensions system, that to a large extent uses cheaper passive vehicles.
The data surrounding Norwegian funds reflects closely developments in the Swedish funds market also. The same Morningstar report – which looked at fees in some 21 European fund markets – also found that fund investors in Sweden were benefitting from falling costs. However, Statistics Sweden has also found that households reduced their exposure to funds through the second quarter of the year.