The European Securities and Markets Authority published its 2025 Costs and Performance report on EU retail investment products, finding that ongoing costs continued to decline in 2024 and that UCITS performance strengthened, while noting that cost improvements were largely driven by newer, lower-fee funds rather than broad-based reductions across long-standing products. For UCITS, ongoing costs fell by 8% for retail equity funds and by almost 15% for retail bond funds, while existing funds saw smaller reductions of 3% and 9% respectively. UCITS returns improved markedly in 2024, with equity and mixed funds posting their second-best results since 2020 and bond funds reaching their highest returns, and real net returns turning positive across all fund categories compared with 2023. ESG UCITS continued to have lower costs than non-ESG UCITS but underperformed in 2024, and funds under the Sustainable Finance Disclosure Regulation classified as Article 9 recorded lower returns than Article 6 funds. Alternative Investment Funds remained mainly held by professional investors, with the retail share falling from 14% in 2022 to 9% in 2024, while 2024 annual net returns were positive across AIF categories. Structured retail product costs were broadly stable, interest-rate linked products increased their market share to 27% from 1% in 2021, and structured products maturing in 2024 delivered positive gross returns that do not reflect investor-paid costs.

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