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JPM wages price war on low-cost funds

JP Morgan Asset Management is cutting the fees on its £61m UK active 350 fund in a bid to compete with ultra-low-cost index tracker funds.

The company is to rename the fund JPM UK active index plus and will shift its investors into a low-fee share class in response to recent criticism of the “expensive” active fund industry.

The fund, which is managed by Michael Barakos and Christopher Llewelyn, currently has retail charges of 1.18 per cent a year and 0.6 per cent for institutions but investors would be charged no more than 0.55 per cent under the plans.

This includes 0.4 per cent of basic charges and a 10 per cent fee on returns delivered above the fund’s FTSE All-share benchmark, payable on outperformance of up to 1.5 per cent in any accounting period.

The changes are pending the outcome of a shareholder vote on January 28.

Hargreaves Lansdown senior analyst Meera Patel says: “If it can deliver returns in line with the active fund market and charge less in fees then it is putting other funds that are third or fourth-quartile to shame.”

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