Citing strong growth in demand for low cost solutions as the reason for the decision, Ben Waterhouse, head of UK retail sales at Fidelity Worldwide Investments told Portfolio Adviser: “There has been a real focus, post the RDR on cost, and especially on accessing equity investments at as low a cost as possible.”
“We believe that reducing the costs across the range puts us in a very strong position and it is part of our strategy to be the dominant player in the index tracker market.”
According to the group, the new pricing will be available directly through Fidelity Personal Investing, via advisers using Funds Network and to selected wealth managers. This is a change as the range of funds, which were launched earlier this year, were previously only available direct through Fidelity.
“Fidelity’s move makes it the lowest cost provider of index tracker funds available to UK retail investors today. The average ongoing charge for a UK tracker from one of the four leading providers stands at 0.16%,” it said.
The fund charges can be seen in the table below.
| Fund | Via Fidelity | Via other providers |
|---|---|---|
| UK | 0.07% | 0.09% |
| US | 0.08% | 0.10% |
| Japan | 0.10% | 0.10% |
| Europe ex-UK | 0.10% | 0.10% |
| Pacific ex-Japan | 0.13% | 0.13% |
| Emerging Markets | 0.23% | 0.23% |
| World | 0.18% | 0.18% |
According to Waterhouse, the OCF cost measure is useful because it allows people to compare prices directly and know what they are getting.
"Given the importance of price to an index decision, we felt this was the most appropriate pricing model to use," he said.
