Why index tracking is not all about the 'race to the bottom'

Investors urged to look beyond simple price comparisons

Dan Attwood, proposition manager of index funds at LGIM, warns against purely focusing on price when selecting passive funds, outlining the other factors investors must keep in mind.

After a relatively quiet few months on the battlefields, the so called passive price war has seemingly been reignited once again with two well known providers slashing their fees. For the end investors the ‘race to the bottom' that has taken place regarding costs over the last couple of years has ultimately been good news because they are paying less and less to get access to index-tracking funds. Indeed we cut fees on our retail index range by up to 55% in November last year and we remain committed to keeping them at the current low levels. When such cuts take place the industry...