Fidelity has fired a salvo in the passive price war by extending its cheapest index funds to investors using external platforms.
The asset manager is to merge the W share class for its seven index funds into the cheaper P share class, previously only available to investors using its own platform FundsNetwork.
The move, which comes into effect next month, means charges on the firm’s UK, US, Europe ex UK, Japan, Pacific ex Japan, World and Emerging Markets trackers will fall by 0.02 percentage points for investors using external platforms.
External platform users will now be able to buy Fidelity’s UK tracker for a fee of 0.06 per cent, a price the firm said was matched only by BlackRock. The price for Fidelity’s US tracker, of 0.07 per cent, is only currently matched by HSBC Global Asset Management’s offering. The charges exclude platform fees.
A Fidelity spokesman said: “We have now decided to merge [share classes] to make sure all clients, not just those on our platform, have equal access to our market-leading tracker funds at the lowest cost.”
The switch is the latest move in a fierce price war between passive providers. Rivals such as Vanguard and BlackRock have used economies of scale to reduce costs.