The price war raging in the passive space is yet to translate into lower fees for a number of UK-focused offerings, with some investors paying over 16 times more than they should for such exposure.
Research by Square Mile suggested the downward pressure on fees, which has seen a number of providers including Vanguard, Fidelity and HSBC reduce charges in recent years, is yet to bring down charges on a number of products.
According to the firm's analysis, some 12 per cent of passive assets in the UK All Companies sector sat in five funds with ongoing charges figures (OCFs) above 1 per cent, compared with 0.06 per cent for the cheapest offering.
The most expensive product had an OCF of 1.43 per cent.
Square Mile warned that though the asset management industry had moved to reduce charges for passives, investors could be paying some £53.4m more in fees per year than necessary in order to gain passive exposure to UK equities.
Victoria Hasler, the firm's head of research, said: "The asset management industry has taken steps to lower charges for their passive funds to reflect a more competitive market, and this is to be applauded.
"Nonetheless, there still remains great disparity and given that the opportunity for passive funds managers to reduce tracking error and thereby enhance returns is limited, there can be no justification for maintaining high fees."
The research also looked at active funds in the UK All Companies sector, warning only 21 of 209 funds had OCFs of less than 0.75 per cent.
Some 130 funds, representing 75 per cent of assets in the sector, charged an OCF between 0.75 and 1 per cent.
The findings come at a sensitive moment for the industry, which stands charged of, on average, charging active fund fees which are not justified by higher returns.
