LGIM slashes fees on across index fund range

LGIM said it expects the proportion of IMA retail mutual funds under management in index funds to jump from 10% to 19% between now and 2020 and said price remains a major determining factor in the popularity of these funds.

Honor Solomon, head of retail distribution, EMEA, at LGIM added: “Index funds now account for 10% of all UK funds under management, and our experience with advisers suggests this will only grow further as they find more uses for trackers in client portfolios. Price is a key factor in the popularity of index funds and we are delighted to be able to bring to market a highly competitive set of new prices on a comprehensive range of asset classes.

Indeed, pricing within the passive space has been under pressure for some time, with everyone from Fidelity to Vanguard significantly cutting prices in recent months across both index and ETF products.
The price changes take effect from 1 November and apply to the clean units that are available on intermediary platforms as well as to direct intermediary deals that meet minimum investment levels.

However, it has also struck a deal with Hargreaves Lansdown which seven of these funds being offered at even lower prices (Ongoing charging figures of between 0.06% and 0.17%) to clients of the Hargreaves Lansdown Vantage platform.

According to Adam Laird, head of passive investing at Hargreaves Lansdown, these lowered charges are the latest in a string of price cuts.

“Passive investing is a growing market in the UK. Assets have grown 25% in the last year, and over half of September’s retail fund sales went into index trackers.”