Bigger funds used to charge less for management, but latest research shows some of Europe’s largest, best-selling funds levy the highest total expense ratios. Paula Garrido investigates

With the global economy perched on a tightrope, major long-term portfolio risks must be highlighted
Circus Game
I’m up on a tight-wire
One side’s ice and one is fire
It’s a circus game with you and me
– “Tight Rope” by Leon Russell

Products with the potential to deliver high returns while retaining a focus on capital preservation can cut the mustard during uncertain market conditions
Firm evidence of an economic recovery traditionally prompts investors to switch out of fixed income assets on expectations of generating higher returns from other products. However, while global economic growth remains strong, we believe that during this business cycle the switch will not be as pronounced.

The Danish choice for achieving excess gain in a unique and rock-solid asset class
Mortgage bond funds, which can be marketed on a cross-border basis through an open-ended Sicav structure, are fast developing as a vehicle of choice to achieve premium yields.
For product manufacturers in the Scandinavian market, these yields may be in excess of comparable bond offerings from governments such as Denmark’s. Successful fund managers may use a controlled and selective process of investing in highly secure and higher yielding Danish mortgage bonds, for example.

Private clients are increasingly demanding an investment approach which allows their manager to separate the ability to take fixed income risk into various dimensions