And so it begins…

HSBC’s announcement that it plans to cut the annual management charges across its index tracking range could be the first step in a possible passive price war sparked by the entrance of Vanguard into the funds arena.


In the past, HSBC charged investors an annual management fee of between 0.5% to 1% in its passive funds, but from the start of September all seven funds will charge 0.25%. Why it has taken until now for the price drop is open to question, but what will be interesting to see is whether or not Virgin —whose FTSE tracker has a 1% total expense ratio—will soon follow suit.