The country was upgraded from a C+ destination to a B- in the 2013 edition of Morningstar’s Global Fund Investor Experience Report and was praised for its open architecture and better-than-average tax regime for investors.
High fees were cited as a negative, although this is expected to improve as a result of RDR, while the switch from the simplified prospectus to the KIID detracted from the country’s disclosure grade.
The report also revealed the median asset-weighted expense ratios across a number of asset classes; see the chart below.
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Test criteria
The report graded countries across four broad categories – regulation and taxation, disclosure, fees & expenses and sales & media.
The UK topped the chart in terms of sales and media, both due to the outlets from which investments can be accessed and the extensive coverage of investment in the media.
The top and bottom scorer for each category is shown in the table below.
| Category | Top performer | Bottom performer |
| Regulation and taxation | Singapore | South Africa |
| Disclosure | US | South Africa |
| Fees and expenses | US | Canada |
| Sales and Media | UK | Belgium, Spain and Thailand |
The broader picture
The UK’s score was broadly in line with the rest of Europe, and was the same as that of Spain, Sweden and Germany. It outperformed France (C+), and underperformed Netherlands.
The US was named as the most attractive investment destination, and was awarded the only A rating. Fees there are significantly below those charged to European investors despite the relatively equal size of the two markets.
South Africa was deemed the worst investment environment, with poor disclosure, and unfavourable regulatory and tax regimes.
Meanwhile, is UK investor confidence on the up or down? Find out here…
