Passive providers under pressure to cut fees as Fidelity reignites price war

Passive fund providers are under renewed pressure to reduce the cost of investing in their funds, following a move by Fidelity Worldwide Investments to cut fees on its index tracker range.

In May, Fidelity cut the total expense ratios (TERs) on six of its seven-strong range of passive trackers. Its UK and US trackers, priced at 7bps and 8bps, respectively, are now less than half the price of those offered by competitors including Vanguard, BlackRock, and Legal & General. Fidelity's range has seen £337m of inflows since the start of March to 13 August, with asset under management currently standing at £1.6bn. Ben Waterhouse (pictured), head of UK retail sales at Fidelity, said: "The increasing bifurcation between active and passive management create both a challenge and ...