To try and lure investors from rivals, Fidelity U.K. has cut the management fee on its flagship equity index fund to 10 basis points, about one-tenth of what other fund companies in the U.K. charge, Fidelity told Reuters.

The total expense ratio on the Fidelity MoneyBuilder UK Index Fund is just 30 basis points, according to the firm. Fidelity marketing research has found 16 other fund complexes in the U.K. charging 1% or more for index funds, seven of which charge an additional 5.5% front-end charge.

"Savers choose index funds because they are simple and low cost, but too many are overpaying for their funds, in some cases by 10 times as much," Fidelity Managing Director Richard Wastcoat told Reuters.

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