This eighth Costs and Performance report shows that ongoing costs in the EU continued to decline in 2024. This is however mostly due to new investment funds entering the market, as they usually charge lower fees. Cost reductions for long-standing funds remained more limited.

Verena Ross, ESMA Chair said:

"In 2024, EU retail investment fund market saw stronger performance and gradually declining costs, driven largely by new funds.

The data we publish today shows gradual cost pressure in EU markets and - with that - improving investor outcomes. The report highlights however that benefits are uneven and product choice matters. Transparency and competition remain key to translating market improvements into real gains for investors."

Thecost and performance of productsare key determinants of the benefits retail investors in the EU can get from their investments. Clear and comprehensive information enables investors to assess costs and past performance and supports informed decision-making and retail participation in capital markets. The findings also demonstrate the importance of cost transparency, as well as the obligation for asset managers and investment firms to act in the best interest of investors.

The key findings in the report are:

• UCITS costs declined gradually, driven mainly by new funds,with ongoing costs falling by 8% for retail equity funds, and by almost 15% for retail bond funds. Cost reductions were more limited for existing funds, at 3% for equity funds and 9% for bond funds.
• UCITS performance improved significantly in 2024. Equity and mixed funds achieved their second-best results since 2020, while bond funds reached their highest level of returns. Real net returns were positive across all fund categories, marking a clear turnaround from 2023.
• ESG UCITS continued to have lower costs than non-ESG. However, in 2024, ESG funds underperformed their non-ESG equivalents. Similarly, funds classified under SFDR Article 9 recorded lower returns than Article 6 funds.
• Alternative Investment Funds (AIFs) remained dominated by professional investors, and between 2022 and 2024 the share of retail investors investing in these products decreased from 14% to 9%. Annual net returns were positive across all categories of AIFs in 2024.
• Structured Retail Product costs remained broadly stable in 2024, while interest-rate linked products continued to gain market share, reaching 27% - up from just 1% in 2021. Structured products that matured in 2024 delivered positive gross returns, although these figures do not reflect the costs paid by investors.

Further information:

Ana Dilaverakis

Communications Officer
[email protected]