The £208.9m Old Mutual UK Index fund has an ongoing charge of 0.45%, which until Thursday meant it was the third most expensive FTSE All Share tracker in the UK.
However, the £32.6m Threadneedle Navigator UK Index Tracker, which had an OCF of 0.91%, closed on Thursday along with two other funds in the range: the £22.7m Navigator Income Trust, which had an OCF of 1.46%, and the £14.3m Navigator Growth Trust, which had an OCF of 1.75%.
A Columbia Threadneedle spokesperson said the closures were due to the low level of assets in the unit trusts, which made them economically unviable.
The changes mean the Old Mutual UK Index is now the second most expensive FTSE All Share tracker, but if Aberdeen Standard Life makes changes to the Virgin UK Index Tracking Trust, which has an OCF of 1%, the Old Mutual fund could soon land the unfortunate title of the costliest fund of its type.
An Old Mutual Wealth multi-asset spokesperson said the fund is available in a number of different share classes and the majority of clients in the fund incur charges of 0.3%. “We regularly review pricing across our range of investment solutions, including the Old Mutual UK Index,” he said.
The tracker fund, along with the World Index and Gilt fund, which both have a 0.3% charge, are used in the multi-asset range and therefore will not be part of the Old Mutual Global Investors spin out, which is being led by Richard Buxton as part of Old Mutual’s managed separation.
The Threadneedle closure is also unwelcome news for Virgin Money, which is now more than twice as expensive as the next most priciest rival product.
Aberdeen Standard Investment did not comment on whether it would slash fees on the Virgin Money product when it takes responsibility for the bank’s £3.7bn assets under management under a joint venture announced on Tuesday.
But a spokesperson said the joint venture provides a “significant opportunity to transform the Virgin Money retail investment offering”. The high-cost product, holds £2.7bn in assets representing 73% of the total Virgin Money AUM.
The Janus Henderson UK Index, F&C FTSE All-Share Tracker and Aviva Investors UK Index Tracking funds round out the top-five dearest products tracking the FTSE All Share following the closure of the Threadneedle unit trust.
An Aviva Investors spokesperson said its fees had been “significantly reduced” in recent years. “We believe that our fees are competitive compared to other non-specialist index providers,” he said.
A BMO Global Asset Management spokesperson said they regularly review fees across its range of products, with a view to ensuring they provide value for clients while considering the costs of managing those funds.
Costliest FTSE All Share trackers
| Virgin UK Index Tracking Trust | 1.00 |
| Old Mutual UK Index | 0.45 |
| Janus Henderson UK Index | 0.36 |
| F&C FTSE All-Share Tracker | 0.32 |
| Aviva Investors UK Index Tracking | 0.23 |
