American fund manager BlackRock has been sued by investors in the US who claim that the firm has breached its fiduciary obligations by charging exorbitant fees on mutual funds.
The suits are filed against the company includes one concerned to Equity Dividend fund with management fee for all share classes of 0.54%, and remaining three related to Global Allocation fund that charges 0.75%.
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One of the complainant claimed that the BlackRock Equity Dividend fund of $30.5 billion returned only 74% of the investment management fees it collected to the fund’s subadviser and retained over$37.6 million in the 2013 fiscal year, the Financial Times has reported.
In addition, the lawsuits also raised questions over the Equity Dividend fund’s failure in reducing its fees in accordance to its rising asset base, besides comparing the excessive charges with the lower fees charged by a comparable non-BlackRock fund sub-advised by a BlackRock affiliate.
The news agency has also quoted BlackRock spokeswoman rejecting the claims and affirmed that the two funds in question are competitively priced.
"The suits are without merit and we intend to vigorously defend against the actions," the spokesperson added.
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By GlobalDataBesides BlackRock, other investment managers including JPMorgan, Hartford Financial Investment Services, Axa Equitable Life Insurance, ING Investments, Russell Investments Management, and SEI Investments are facing the similar suites for over-charging.
