October 3, 2017 / 9:45 AM / a year ago

Fidelity International to cut fees if funds underperform indexes

LONDON, Oct 3 (Reuters) - Asset manager Fidelity International said on Tuesday it was launching a new pricing model for its active equity funds that will see its management fee fall unless a fund outperforms its benchmark.

The move comes as fund managers who actively pick stocks and bonds face pressure on fees from cost-conscious investors who are increasingly turning to lower-cost index-tracking funds instead.

Fidelity also said it would pass on the costs of research to clients under new European Union rules due to go live in January, bucking the trend set by many regional peers who have decided to absorb the costs.

However, the reduction in base management fee for its active equity funds would exceed and offset the cost of the research, it said in a statement. (Reporting by Simon Jessop; Editing by Rachel Armstrong)

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