Low-cost passive funds set to challenge active space

Growing number of fund houses with institutional-style passive funds look to bring low-cost beta products to the UK retail market

Fund groups are increasingly looking to bring institutional-style passive funds to the retail space as investors re-entering the market look to lower-cost beta products. Schroders says its Quantitative Equity Product range is ideally placed to be brought to the retail space, which could happen within two years. It says if groups have institutional funds, with lower tracking errors and lower alpha targets, they are fully scaleable and could be brought across to meet the demands of retail investors at a lower cost than the typical unit trust AMC of 1.5%, especially post-retail distributio...