Protection of Interest of Investment Funds Participants in the Context of Closet Indexing
DOI:
https://doi.org/10.18778/2391-6478.3.3.06Keywords:
consumer protection, closet indexing, active share, tracking errorAbstract
Closet indexing is a practice used by asset management companies consisting in relatively passive portfolio management by funds declaring an active approach to management, while charging relatively high management fees, inadequate to demonstrated commitment. As the results of research carried out by national supervisory authorities, independent analytic firms as well as European Securities and Markets Authority (ESMA) show, closet indexing is experienced – with varying intensity – by many European countries and exposes investors on significant losses.
Downloads
References
Caquineau M., Möttölä M., Schumacher J., 2016, Active Share in European Equity Funds. The Activeness of Large-Cap European Fund Managers Through the Lens of Active Share, Morningstar, Chicago.
Cremers M., Ferreira M.A., Matos P., Starks L., 2015, Indexing and Active Fund Management: International Evidence, Working Paper (version: January 2015), http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1830207 DOI: https://doi.org/10.1016/j.jfineco.2016.02.008
Cremers M., Petajisto A., 2009, How Active is Your Fund Manager? A New Measure that Predicts Performance, „The Review of Financial Studies”, vol. 22, no. 9. DOI: https://doi.org/10.1093/rfs/hhp057
ESMA, 2016, Supervisory Work on Potential Closet Index Tracking, ESMA/2016/165, https://www.esma.europa.eu/sites/default/files/library/2016-165_public_statement_-_supervisory_work_on_potential_closet_index_tracking.pdf
Finanstilsynet, 2014, Markedsudviklingen i 2013 for Investeringsforeninger, Specialforeninger og Hedgeforeninger, https://www.finanstilsynet.dk/~/media/Tal-og-fakta/2014/Markedsudvikling/Markedsudviklingsartikel_Investeringsforeninger_2013.ashx
Finanstilsynet, 2015, Management of Equity Fund – Corrective Order, http://www.finanstilsynet.no/en/Document-repository/News/2015/Q1/Management-of-equity-fund--rectification-order/
Finanstilsynet, 2016, Active/Ppassive Management in Danish UCITS, https://www.finanstilsynet.dk/en/Nyheder%20og%20presse/Pressemeddelelser/2016/PM-BSH-tale-IFB-200416
ICI, 2016, Average Expense Ratios for Equity, Hybrid, and Bond Mutual Funds Hit 20-Year Lows, https://www.ici.org/pressroom/news/16_news_trends_expenses
Marriage M., 2015, Sweden Begins Crackdown on Closet Trackers, http://www.ft.com/intl/cms/s/0/d39d9a08-cf22-11e4-b761-00144feab7de.html
Marriage M., 2016a, German Regulator Launches Closet-tracker Investigation, http://www.ft.com/intl/cms/s/0/f4c8fc8e-d1a8-11e5-831d-09f7778e7377.html#axzz417QtxTka
Marriage M., 2016b, Italian Closet Trackers Sanctioned by Regulator, http://www.ft.com/intl/cms/s/0/85387d82-e20f-11e5-9217-6ae3733a2cd1.html#axzz42D1jJKEj
Marriage M., Mooney A., 2016, Financial Conduct Authority Closes in on `Closet Tracker` Funds, http://www.ft.com/intl/cms/s/0/cbe59c82-fcbe-11e5-b3f6-11d5706b613b.html#axzz47fgpbMmm
Moisson E., 2016, Closet Tracking Row Boosts Passive Flows in Sweden, http://www.ft.com/intl/cms/s/0/4d8cc99a-f733-11e5-96db-fc683b5e52db.html#axzz44Z8LDyUp
Mooney A., 2015, Luxembourg Probing Closet Trackers, http://www.ft.com/intl/cms/s/0/679ed476-d3ae-11e4-99bd-00144feab7de.html#axzz3ZS09zuuT
Norstein V., Varran H., 2015, A Comprehensive Study of Actively Managed Equity Funds in Norway, Master Thesis, Copenhagen Business School, http://studenttheses.cbs.dk/bitstream/handle/10417/5524/vegard_norstein_og-haakon_varran.pdf?sequence=1
Pearce A., 2014, European Tool to Out `Closet Index Trackers`, http://www.efinancialnews.com/story/2014-10-13/swedish-shareholders-association-closet-index-trackers
Petajisto A, 2013, Active Share and Mutual Funds Performance, „Financial Analysts Journal”, vol. 69, no. 4. DOI: https://doi.org/10.2469/faj.v69.n4.7
SCM Private, 2013, Closet Indexation. A UK Epidemic, http://www.scmprivate.com/content/file/knowledge/research/closet-indexation-report-full-sept-13.pdf
SCM Private, 2015, Closet Indexation. The UK Epidemic Continues, http://www.scmprivate.com/content/file/knowledge/research/SCM-direct-closet-indexation-epidemic-continues-report-february-2015.pdf
Downloads
Published
Issue
Section
License
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
How to Cite
