How much fund costs really matter
The point is not paying little: it is that what you pay is justified by what you get — and European rules require the manufacturer to prove it before selling.
Value for money does not mean a product is cheap. It means that what you pay is justified by what you get in return. An expensive fund can be worth its price; a cheap one can fail to be. The question is not how much it costs, but whether that cost is proportionate.
European rules do not cap costs. They do something different and more demanding: they require whoever builds an investment product to demonstrate, in writing and before putting it on sale, that the price is proportionate to the value offered. A product that fails the test should not be approved for distribution.
The rule has a limit, though, and it is worth knowing before you rely on it. The comparison happens between similar products, within the same group. A fund that costs what its competitors cost passes the test even when the entire category is overpriced: proportionality is measured against the group average, not against what the same result would cost elsewhere.
This is why the average says nothing about your portfolio. The only comparison that produces a figure you can act on is the one on the individual instrument: what the fund you hold costs, and what the same exposure costs through an equivalent ETF.
The effect of costs compounds over time
A fee difference that looks small today becomes huge over long horizons, because costs compound exactly like returns — but against you.
Illustrative example: on €100.000 of capital, with a hypothetical gross return of 4% a year over 30 years, a fund costing 1,60% a year reaches €203.704; an equivalent ETF at 0,15% reaches €310.595. The difference is €106.892, equal to 107% of the initial capital. Net of the 26% tax on the gain, €79.100 remains. Same market, same risk: only the cost changes.
Hypothetical projection for illustration only; real returns vary and are not guaranteed.
How the check works
The obligation comes from the Retail Investment Strategy, on which Parliament and Council reached political agreement on 18 December 2025. It does not introduce a maximum price: it introduces a burden of proof on whoever builds the product.
The mechanism is dual: peer-group assessments for MiFID instruments such as funds, and supervisory benchmarks for insurance-based investment products (IBIPs). Firms must identify and quantify all costs borne by the investor and verify they are justified and proportionate.
- All costs must be made explicit and quantified.
- Cost must be compared against a reference benchmark.
How Value for Money applies the directive, today
You don't have to wait for full transposition to reason the way the directive requires. Value for Money does exactly that, on your real portfolio:
- 1Quantifies in euros what each fund you hold costs you per year, starting from the stated TER.
- 2Compares each fund with the equivalent ETF, the natural value-for-money benchmark.
- 3Gives each fund a clear judgement.
- 4Is independent: no rebates from managers, banks or insurers, no conflicts of interest.
In other words, we apply the logic of the European directive to your concrete case: with data and free of third-party incentives.
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