US-based funds performed better on average than their UK counterparts and the most likely reason for the difference in performance is fees. In the U.S. mutual funds are required to have a majority of independent board of directors who have an objective of keeping fees down whereas this is not the case in the UK where the directors are employees of the fund management company. Private investors in the U.S. also appear to be more cost-aware than their UK counterparts, placing pressure to keep fees down.
The Retail Distribution Review, which will ban commissions, may change things in the U.K.
Read more at the Financial Times article Why are UK investors not more like those in the US?
