Fidelity cuts passive fees

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Fidelity has become the latest ETF provider to cut the cost of its index range, with costs now starting at 0.06 per cent for customers going through FundsNetwork.

The Fidelity Index UK fund will now cost 0.06 per cent via FundsNetwork and for some wholesale clients, or 0.08 per cent via other platforms.

Assets under management in the trackers have doubled since last May, when Fidelity made a price cut, says Ben Waterhouse, head of UK retail sales at Fidelity Worldwide Investment. “This growth provides us with the opportunity to once again reduce fees for the benefit of our clients.”

Fidelity has cut the costs on its other trackers, with the US tracker now charging 0.07 per cent on FundsNetwork, and the Europe ex-UK and Japan funds costing 0.10 per cent on FundsNetwork (see table).

Fidelity tracker fees (new charges apply from 1 October)

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Source: Fidelity

The price war in passive investments has ramped up recently. BlackRock has most recently cut the cost of its tracker funds, slashing fees for five core funds in its Collective Investment Funds range as part of a regular review of fees.

Vanguard also cut costs recently by removing the dilution levy of 0.10 per cent on its Vanguard LifeStrategy fund range.

Hargreaves Landsdown head of passive investments Adam Laird has predicted that costs could get as low as 0.03 per cent – the cheapest passive fund tracker offered in the US.

“Whilst active management remains at the heart of our business, we are pleased that Fidelity can continue to meet the demand for passive investment through our range of market leading tracker funds,” Waterhouse said.

The new Fidelity charges will be in place from 1 October.