Every quarter, the Financial Supervisory Authority (Finansinspektionen) publishes the average fees for some of the largest fund categories. The purpose is to make consumers more aware of prices and fees when it comes to their investments.
“Moa Langemark, a consumer protection economist at FI, said in a press release, “In order for your savings to grow as effectively as possible, it is important to be aware of what you are paying and compare alternatives so that you are not overpaying for the funds you have chosen.”
The authority has provided an example for someone who saves 2,000 SEK per month for 30 years. If the money is invested in a global index fund, the total fees paid would amount to 72,639 SEK, based on the median fee. However, if one chooses an actively managed global fund, the fees would total 313,599 SEK. This results in a difference of over 200,000 SEK.
During the third quarter of this year, the median fees were as follows according to FI’s compilation:
– Actively managed Swedish funds: 1.32%
– Sweden index funds: 0.28%
– Actively managed global funds: 1.30%
– Global index funds: 0.35%
These figures highlight the significant impact that fees can have on long-term savings and investments. It is crucial for consumers to be mindful of the fees they are paying and to consider lower-cost alternatives, such as index funds, to maximize their returns over time. By understanding the implications of fees on their investments, individuals can make more informed decisions and ultimately achieve their financial goals more effectively.