Fidelity calls for 'PNAV' to become key passive comparison metric

clock • 2 min read

Fidelity has proposed an overhaul of conventional methods of comparing tracker funds' performance, saying simply looking at tracking errors can produce 'illusory' results.

Index funds have seen demand grow rapidly in recent years and Fidelity's platform FundsNetwork has seen an 85% rise in net sales of its 273 index products. However, as headline costs are cut to the bone, wealth managers and advisers have found a number of other barriers are preventing them from adequately comparing performance between the various products. According to a Fidelity study, the most commonly sought factor when choosing an index fund is ‘efficient replication of index performance', measured via a fund's tracking error. The problem arises when valuation points of a fund ...

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