Passives confusion: Ratings firm clash underlines comparison struggle

Passives confusion

As Investment Week reported last year, attempting a comparison of passive funds that goes beyond headline charges has been a bit of a nightmare for fund buyers. Now that ratings services have stepped into the game, one would finally expect some clarity.

But things are not that simple in the passive investing world, and even those analysing the data are unable to reach the same conclusions on key products.  Last week, FE Trustnet revealed a new passive ratings service for ETFs and trackers available for sale in the UK, in recognition of the growing importance of this area of the market for UK investors - and the lack of data available in this field.  When looking at products tracking the FTSE 100 index, FE identified the L&G UK 100 Index fund as one of the worst, with a stated tracking error of 1.7%.   However, a separate report on...