Aviva: Savers must pay for market meltdown safetyComments Off on Aviva: Savers must pay for market meltdown safety
ONE of the Europe’s biggest fund chiefs — Aviva Investors — has entered the row over fund fees saying savers must stump up if they want to be sheltered from future market meltdowns.
Boss Euan Munro, who looks after £290 billion for savers, said attempts to dodge market slumps had a greater “social benefit” because they stopped jittery savers from turning their back on investing when markets go south.
“The reduced level of risk is a massively undervalued benefit. Not having excessive volatility means people don’t sell out, they stay engaged for longer. It’s better for them in the long term,” he said.
“If you’re trying to protect investors from stock market crashes you can’t do that for a handful of basis points.”
The debate over high fund charges has escalated recently after Prime Minister David Cameron stepped in to warn fund bosses that complex charging for active funds “saps people’s enthusiasm for saving”.
Critics have hit out at pricey premium funds which try to outpace the market, saying they perform no better than cheap tracker funds which mirror the market roller-coaster.
“I don’t think any of our propositions are egregiously priced. I can’t entirely defend the industry — I can only defend my own firm.
“The vast majority of our funds are ahead of their reference benchmark,” Munro said.