From 16 November 2015, the ongoing charge for the HSBC American Index Fund which tracks the S&P 500 index, will be eight basis points (bps), down from the current 18 bps.
The ongoing charge for the HSBC European Index Fund, which tracks the FTSE Developed Europe ex UK Index, will be 10 bps, down from 20 bps. While the charge for the HSBC FTSE All-Share Index Fund will be cut to seven bps from 17 bps.
“Passive investing is a big and expanding market in the UK and as a fund provider we are committed to playing a part in this expansion,” said Andy Clark, chief executive of HSBC Global Asset Management (UK).
“This price reduction isn’t just for new customers, but also applies to people who are already invested,” he said.
The price drop is the latest in a series of industry cost-cutting initiatives, following on from Vanguard cutting the initial levy on its LifeStrategy range; BlackRock lowering the charges on its Collective Investment Funds range and Fidelity dropping the annual management charge on its Asian Values trust.
ETF popularity soars
With bond and equity prices at relatively high levels across the developed markets, tracker funds have become extraordinarily popular with investors in recent years as the modest returns on traditional managed funds get eaten away by fees and charges.
In the first nine months of 2015, investors were still setting fresh records with the amount of net new funds allocated to exchange trade funds and products.
According to ETFGI, an independent research and consultancy, net inflows over the first three quarters of 2015 were $251.5bn (£163.9bn, €221bn), marking a 25% increase over the prior record set at the same period last year.
In Europe for the nine months to end September net inflows climbed to $62bn, representing a 30% increase on the record set YTD through end of September 2014.
Investors allocated $32bn in net new assets to exchange trade funds and products globally in September alone, according to ETFGI said.
HSBC Global Asset Management, the asset management arm of the HSBC Group managed assets totalling $446.6 bn at the end of March 2015.
