Fidelity to expand passive range to seven funds

The City-based fund giant is launching four passive funds in March to take its range to seven trackers in total, and will offer the products with ongoing charges from as low as 9 basis points.

Fidelity’s tracker range will be expanded from simply a UK, US and global equity tracker to also including Japan, Europe excluding UK, Pacific excluding Japan and emerging markets funds.

Passive investing has expanded in recent years thanks to regulatory change, which removed active funds’ ability to pay commission to intermediaries, and as the cost of investing has come into sharp focus.

Fund management trade body the IMA last month revealed that sales into passive funds totalled £3.2bn last year - the highest figure ever recorded.

It said passive funds under management had risen to £74.2bn, or 9.6 per cent of total industry assets, compared to a market share of just 7 per cent in 2010.

Ben Waterhouse, head of UK retail sales at Fidelity, said the tracker range would be available to advisers solely through Fidelity’s fund platform, FundsNetwork, and also sold to discretionary managers.

He said if demand grew Fidelity would “consider our position” in terms of broadening access to the funds by listing them on other platforms.

The funds will be managed by Boston-based institutional asset manager Geode Capital Management, which has been managing equity index assets since 2002 and runs $165bn (£100.9bn) of assets.

At present, the UK product is run by Fidelity, but Mr Waterhouse said the company was considering whether to pass the investment managerment to Geode, which has had a relationship with Fidelity for some time.

Mr Waterhouse said the group had been “pretty aggressive” on its pricing of the products adding that the use of a single ongoing charge figure was consistent with other industry players.

“It gives investors a good mechanism for comparing costs on a like-for-like basis,” he said.