Lipper has recently released a study on subadvised fund expenses and management fees. Lipper found that, on average, subadvised funds have slightly higher median total expense ratios and slightly higher management fees than non-subadvised funds. Lipper points out that there may be legitimate reasons for these differences, including that the higher total expenses of subadvised funds may be due to the expertise offered by the subadvisor.
For 15(c) purposes, Lipper recommends the following:
[S]ubadvised fund boards [should] consider their expenses in conjunction with those of funds that are not subadvised. In addition, boards may consider reviewing a subadvised expense group against their subadvised fund to ensure their additional expenses related to the subadvisor are in line with other subadvised funds. Finally, boards should closely examine the portion of the fee reserved by the advisor in light of the duties of the subadvisor, as compared to the advisor.