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AJ Bell slashes passive model charges

AJ Bell slashes passive model charges

AJ Bell has cut fees on three of its passive multi-asset funds as price competition continues to ratchet up pressure on investment costs.

The passive funds launched almost two years ago with an ongoing charges figure (OFC) of 0.5%. Its balanced fund fee was initially trimmed to 0.47% in June and has now been further cut to 0.4%

The wrap platform said this is part of its commitment to pass on cost efficiencies as the funds grow in size.

The business said it had trimmed costs as rising assets enabled it to pass on the scale economy savings. 

Chief investment officer Kevin Doran (pictured) said: 'It is an oddity in the fund management market that despite many costs that fund managers incur being fixed, the percentage charge that customers pay often doesn’t decrease as the funds grow in size.'

Within this figure, the annual management charge is fixed at 0.15%.

The Adventurous and Moderately Adventurous funds, the firm's next two largest funds by assets, have seen their charges fall by 12%, from 0.5% to 0.44%.




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