Which Passive Funds Charge Unnecessarily High Fees?

While recent headlines have been focused on ETF providers slashing costs, investors should be aware there is a wide price disparity between index-tracking funds

Hortense Bioy, CFA 17 January, 2017 | 10:53AM
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In this world of increased automation and commoditisation, passive funds are expected to be ultra-cheap. So much so that there are those who argue it is only a matter of time before the funds tracking mainstream indices such as the FTSE 100 and S&P 500 are given out for free.

Over five years, you could be losing £560 on a £10,000 investment in unnecessary fees

This may sound like an exaggerated claim, but in the United States one can already buy the whole U.S. stock market for a rock-bottom annual fee of 0.03%. In the UK, fees are not quite so low, but they are not far off.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
iShares Core S&P 500 ETF USD Acc GBP32,527.00 GBX1.07Rating
iShares Core S&P 500 ETF USD Dist43.91 USD1.16Rating
iShares MSCI EM ETF USD Dist GBP3,684.25 GBX-1.56Rating
Vanguard S&P 500 UCITS ETF83.54 USD1.06Rating

About Author

Hortense Bioy, CFA

Hortense Bioy, CFA  is global head of sustainability research at Morningstar

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