P1 Investment Management has launched what it claims are the cheapest passive portfolios in the UK, with a total cost of just 0.19 per cent.
The five risk-rated passive portfolios invest in UK equities, global equities and fixed income alongside alternatives with the aim of providing an element of diversification.
Bosses at the company claimed by positioning the portfolio, which was back-tested for five years, for the long term they will be able to minimise transaction fees and only make changes for the purposes of rebalancing or where we feel that the cost of the transaction is outweighed by a saving from an ongoing fee.
Quarterly portfolio rebalancing will take place though to ensure the portfolio remains appropriate for the targeted risk level, according to bosses.
P1, an adviser-led discretionary fund management proposition, was launched a year ago by James Priday, who founded Prydis Wealth.
The group offers a managed portfolio service, a bespoke investment service and an investment platform.
Alan Chan, director and chartered financial planner at London-based IFS Wealth & Pensions, said the new portfolio does appears cheap.
Though he questioned if investors "really need a DFM for a fully passive portfolio”.
"This is always going to be problematic for DFMs. They are not a free service and will almost certainly have their own management fees charged on top.
"So essentially the client is paying a DFM to get them market-returns since they are wholly tracker/index funds. Therefore as an investor, by definition you will receive below market returns when charges are accounted for. Is this good value for money?"
