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Fidelity cuts tracker fees in latest price war salvo

Fidelity cuts tracker fees in latest price war salvo

Fidelity Worldwide Investment has slashed the prices on four of index trackers as it aims to confirm its status as the price leader for tracker funds.

On October 1, Fidelity will cut prices on its UK, US, Emerging Markets and World index funds for both users of its adviser platform FundsNetwork and other advisers.

The UK index fund will remain the cheapest offering, at just 0.06 per cent through FundsNetwork.

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This represents the lowest-cost UK index tracker in the advised market, beating BlackRock by one basis point - though it is matched by the 0.06 per cent L&G UK index tracker available to direct clients via Hargreaves Lansdown.

The Europe ex UK, Japan, and Pacific ex Japan index trackers will remain at their current price. These offerings are already lower than or in line with prices available to advised clients from the likes of BlackRock, Vanguard, L&G and HSBC, Fidelity said.

Ben Waterhouse, head of UK retail sales said: “Since we lowered the cost of the range last May to become the lowest cost provider in the UK, assets under management in these funds have doubled. This growth provides us with the opportunity to once again reduce fees for the benefit of our clients.”

In May 2014, Fidelity lowered the cost of its seven index funds to make it the price leader in the UK. The move instigated a further price war among passive providers: Vanguard cut the price of 25 of its trackers in August of last year, and Legal & General followed by dropping its fees in October.

This year has seen further moves, with BlackRock the last to unveil a series of cuts to its tracker fund prices in July 2015.

As of the end of July tracker products in the UK had a record £107.2bn assets under management, according to statistics from the Investment Association.

RegionNew Fidelity charge on FundsNetwork (%)Existing Fidelity charge on FundsNetwork (%)New Fidelity charge on other platforms (%)Existing Fidelity charge on other platforms (%)
UK0.060.070.080.09
US0.070.080.090.10
Emerging Markets0.210.230.230.25
World inc. UK0.130.180.150.20