InvestmentsMay 22 2013

SCM launches fund cost calculator

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SCM Private has launched an online calculator for fund costs as part of its ‘True and Fair’ campaign for fund cost disclosure.

The free calculator is designed to show in one number the total cost of investing in a fund, displayed in ‘pounds and pence’ terms. It uses industry average figures for trading costs and portfolio turnover rates to estimate how much money would be lost in charges over the life of an investment.

Gina Miller, co-founder of SCM and the True and Fair campaign, said she hoped the calculator would “drive new levels of cost transparency” and encourage more competition on price among fund managers.

“Those firms offering good products, that deliver strong performance at competitive fees, will presumably welcome the fact that consumers will have the ability to clearly see the value that their products deliver via the calculator,” Ms Miller added. “We look forward to these companies endorsing our initiative and hosting the True and Fair calculator on their websites.”

SCM, which is run by Ms Miller and former New Star chief investment officer Alan Miller, first announced plans for the calculator in February.

Their True and Fair campaign, launched in January 2012, has gained the backing of several politicians and has put pressure on the IMA to change its approach to fund costs.

Last month new IMA chief executive Daniel Godfrey announced his plan for a ‘single figure’ cost calculation based on the annual performance of fund units.

SCM said the calculator was “a completely stand-alone not-for-profit business”, and any profits made by the project would be given to charity.