Transaction costs account for 24% of total investment costs, according to a study of institutional investors.
The report, ‘Transaction costs among large asset owners’ by Toronto-based CEM Benchmarking, was compiled following an analysis of transactions from global institutional investors with combined assets of over £2 trillion (€2.24 trillion).
John Simmonds, CEM Benchmarking’s UK Principal, said that the study is one of the most detailed global studies ever completed on transaction costs and “provides an indication of the overall magnitude of these costs for the first time”.
“Transaction costs make up a significant part of the investment costs incurred by institutional asset owners,” he said.
“While transaction costs are clearly material, there is a range and where you sit in that range is dependent on asset mix, volumes of trades, estimates of spreads or simply if you are paying more or less than others for similar activities.
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