Thematic: Trackers and charges

In today's market where increasing attention is being paid to fair value when buying funds, it's hard to believe there remain index tracking funds which feature annual management charges of 1% and above. What's even harder to believe is that there remain passive funds in the market that are priced as expensively as the most expensive actively managed portfolio - with 5.5% initial charges and AMCs of 1.5%.

Several tracking funds continue to feature initial charges on par with actively managed portfolios despite pressure over recent years to remove front end loads and reduce annual fees. In looking at passive funds across the UK All Companies sector alone, some 14 trackers feature initial fees of between 5.5% and 2.5%, according to statistics from S&P Micropal. In fact, the majority of those passively managed vehicles that feature front-end loads tend to be at the higher end of the scale, with most having initial charges of 5.25%. This is higher than the majority of actively managed funds an...