The equity funds of about 80% of the world’s biggest wealth managers, including Julius Baer and Credit Suisse, lagged behind benchmark-index returns over the past five years, a new study shows.

 

The study by MyPrivateBanking.com ranked returns at 15 wealth managers offering at least two global, US, Europe or Asia equity funds against the Standard & Poor’s 500 index, or the relevant MSCI Europe, MSCI Asia or MSCI World indexes.

 

“It is a known fact that funds generally perform worse than the respective indices, but the fact that the self-claimed wealthmanagement specialists have performed so much worse than the market is very disappointing,” says Steffan Binder, research director at the Kreuzlingen, Switzerlandbased company.

 

Total annual fees for investing in the funds ranged from 1.08% to 2.35%, the study shows. While clients typically also pay 1% of their assets in annual management fees, the poor returns were partly due to “bad investment decisions”, Binder says.

 

“Clients are losing on performance and they have to pay relatively high fees,” he says. “If I’m paying as much as 4.5% a year, I’d want something that clearly gives me above- average performance.”