HSBC slashes charges across index tracking range

HSBC Global Asset Management is to cut the annual management charge across its UK-based index tracking fund range to 0.25%.

The move applies to seven funds and means HSBC now offers the biggest index tracking range for retail investors, at a market leading price.

The new charging structure is available for investments as low as £1,000 lump sum or £50 regular savings. The reduced charges apply to new and existing investors and takes effect from 1 September 2009. There is no initial charge.

Andy Clark, Managing Director, Wholesale, HSBC Global Asset Management (UK), said HSBC is committed to allowing advisers full access to these reduced charges and has worked hard with major fund supermarket platforms to ensure these savings are passed on.
He added: "HSBC already boasts a major competitive advantage in this area due to our large and established quantitative capability and a 20 year track record in index tracking. Now, with simple standardised clean pricing across the whole range for all investors, HSBC plans to cement its position as a leading provider of beta by providing a high quality product at the right price."

The revamped range does not pay commission, so is likely to appeal to the growing base of fee-based advisers. Clark said the move also recognised that the Retail Distribution Review would create the need to develop factory gate pricing consisting of a clean fee and advice fee.

He said: "The significant shift in fees on our index range places HSBC at the forefront of a new era in pricing."

The revamping of HSBC's index tracker range also offers a clear price differential between active and passive solutions. The HSBC range of regional and country funds focuses on efficient developed markets, which are most relevant in helping advisers to construct portfolios that offer exceptionally good value to clients.

"We see these lower-cost trackers taking a bigger slice of the wealth management market, as low cost beta takes a bigger role at the core of an investment portfolio. While the debate between active versus passive rages on, we believe there is a clear role for both in all clients' portfolios."