Regulators in Denmark, Sweden and Norway have begun targeting closet-indexer mutual funds, and the U.K.’s Financial Conduct Authority may be next to act, according to the Financial Times.

Read: Case Study: Client dumps advisor over closet indexing

Closet-indexer funds have high active management fees but deviate little from the index. “The Financial Conduct Authority [said] last December that closet tracking was ‘the sort of thing its new fund supervision team might look at,’ ” notes the report.

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