BlackRock slashes charges as passive price war heats up

BlackRock has slashed the charges on some of the trackers in the BlackRock Collective Investment Funds range by more than half.

BlackRock slashes charges as passive price war heats up

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From 11 August the ongoing charge figures for its two UK Equity Tracker funds have been cut from 0.16% to 0.07%, while the US Equity and North American Equity Trackers’ OCF drop from 0.16% to 0.08%.

The fifth offering to have its charges cut is the Continental European Equity Tracker which sees its OCF go from 0.17% to 0.08%.

“These are good quality funds at a competitive price,” said Adam Laird, head of passive investments at Hargreaves Lansdown.  “There is still further ground to be gained in the passive price war, though the arms race in UK and US equities means that battles are likely to rage on new fronts, such as in corporate bonds and emerging markets. There are also some passive providers who are simply sitting in their bunkers and hoping no-one notices they are charging way above the going rate for their funds.”

“We haven’t made any changes to our Core Tracker Fund List as a result of BlackRock’s price cut,” Laird added. “While the reduction is substantial we already have cheaper options available from Legal and General in each of the areas in question.”

“BlackRock’s heritage in index investing dates back to the early 1970’s when we pioneered the first index strategy,” said Tony Stenning, head of UK Retail at BlackRock. “Through our scale, we’re pleased to be able to offer investors five key index equity exposures at a competitive price. We know that UK wealth managers are increasingly combining both index and active strategies alongside each other in their client’s portfolios and we see this trend continuing to grow.”

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