UK firm wants crackdown on index clones

British investors could have saved £3 billion in fees over the past five years had they invested in low-cost passive funds instead of closet index funds, reports FT.

By Staff | September 25, 2013 | Last updated on September 25, 2013

1 min read

British investors could have saved £3 billion in fees over the past five years had they invested in low-cost passive funds instead of underperforming index clones masquerading as active funds, says Gina Miller, the co-founder of SCM Private, the Financial Times reports.

Read: Most active funds aren’t really active

SCM Private is calling on the Financial Conduct Authority to investigate what it calls an epidemic in index cloning. The practice is when active fund managers charge fees to follow a benchmark like the FTSE All-Share, FT explains.