Mutual-Fund Rule Changes Likely To Cut Fees In Singapore

The days of sky-high mutual fund fees in Singapore — some estimate 50% higher than in the U.S. and the U.K -- are likely coming to the end, as new rules giving mutual funds access to the local pension savings market will require a lowering of charges, according to Reuters. The changes, which went into effect Wednesday, require mutual funds to slash fees, but may also have the effect of forcing many of the smaller funds – namely, those with less than US$5 million – out of business and larger firms to shut down their own tiny offerings. Under the new rules, mutual funds may charge no more than 1.95% while money market funds have an expense cap of 0.65%.

"This is part of the ongoing maturity of the industry here," Lindsay Mann of First State Investments told Reuters, "and it's going to cause fund managers to take another look at some of their smaller funds or some of their funds with higher total expense ratios.