Swiss pension funds have “no reason” to invest in funds that are not fully transparent on costs, Swisscanto has said in a debate on the cost of asset management. The asset manager said it was convinced a Pensionskasse should implement its investment strategy “completely with cost-transparent investment vehicles”. It pointed out that, even with hedge funds, it was possible to demand an audited annual financial statement and thereby calculate a total expense ratio (TER).
UBS Global Asset Management “welcomed” the trend towards more transparency and said it had introduced a synthetic TER for certain alternative investments such as funds of hedge funds. However, it also argued that institutional clients using hedge funds understood that, “for conceptual reasons”, some investments are less transparent than, for example, listed equities – “and they know this will not change”. UBS added that higher regulatory demands, as well as the increasing complexity of investments, were leading to higher costs “that have to be covered”.
