Study on the performance and efficiency of the EU asset management industry

The present study documents our findings on the performance and efficiency of the EU asset management industry from the point of view of the final investors. We build performance indicators of funds, in nominal and in real terms, for the period 2003-2012. For equity funds, we find that four countries delivered negative real average annual performances and that ten countries increased the initial investments in real terms. We build statistics on maximum fees according to multiple criteria. Fees charged by passive equity funds are lower by around one third to those charged by active funds. Investors could also at least partially benefit from economies of scale by investing in larger funds. We present some key issues of transparency, conflicts of interest, market structures and investors' behaviour that have an impact on investment performance. We document the low level of satisfaction of consumers. Finally, we build a model measuring the overall outcome of asset management from the perspective of the final investors, either through investment funds directly held or through life insurance and pension products. For the longest period (1995-2012), we find annual averages of real performance rates ranging from -2.1% to 4.7% depending on the country.