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The cheapest funds investors can buy in each major market

Pounds falling from the sky
Investors are being offered cheaper and cheaper ways to access markets via passive funds

BlackRock has cut fees on 12 of its passive tracker funds – some by as much as 50pc – with its iShares brand now offering investors the cheapest access to some markets.

Tracker funds and exchange-traded funds (ETFs) have been involved in a price war as their popularity skyrocketed with investors.

BlackRock's latest cut means investors can now access British and American stocks for 0.05pc – effectively 5 pence for every £100 invested – and will benefit existing and new investors.

British active funds charge around 0.85pc on average, or 85 pence per £100, in comparison.

Ryan Hughes of broker AJ Bell, said: "BlackRock's iShares has taken some pretty serious amounts off its charges while we are also seeing some new entrants come into the market which is creating healthy competition."

With the market becoming more saturated and complicated, investors have a hard time finding out which is the cheapest and most value-for-money tracker and exchange-traded fund (ETFs) out there. Telegraph Money takes you through your options.

British stocks

Investors can buy into the British stock market for as little as 0.04pc, although not via an iShares fund. The £20m Lyxor Core Morningstar UK ETF fund is the cheapest option, and the ETF tracks the broader British market via a Morningstar index rather than the traditional FTSE All Share benchmark.

The £10.3bn iShares UK Equity Index fund is now the second-cheapest following its price cut to 0.05pc from 0.08pc. The £9.5m L&G UK Equity ETF also charges 0.05pc.

American stocks

America is the market analysts often point to as the best area to buy a passive fund, as active managers have generally struggled to beat their passive cousins.

Lyxor also offers the cheapest fund American stocks, with the $56m (£47m) Core Morningstar US ETF also charging 0.04pc. This ETF also tracks a Morningstar index rather than the traditional S&P 500 index.

The £1.4bn iShares US Equity Index fund is now the second cheapest at 0.05pc, following the price cut, and now charges the same as the $80m Invesco MSCI USA ETF.

Global stocks

iShares does not offer one of the cheapest three passive funds that invest in global stocks. The €42m (£39m) Xtrackers MSCI World Index ETF, is the cheapest with a charge of just 0.08pc.

The £1.4bn Fidelity Index World fund is the second-cheapest at 0.12pc, alongside the $307m SPDR MSCI World ETF. All three funds track the MSCI World index, the most common global stocks benchmark.

Rest of the world

In Japan, the £1.7bn iShares Japan Equity Index fund is the cheapest option charging 0.08pc.

Meanwhile, the £2.1bn iShares Emerging Markets Equity Index fund and $13.2bn iShares Core MSCI Emerging Markets ETF are the two cheapest options for emerging market exposure, costing 0.16pc and 0.18pc respectively.

For European stocks, the iShares Continental European Equity Index fund is available for a fee of as little as 0.06pc after being cut from 0.1pc.

However, this is only the third-cheapest fund with the €128m HSBC Euro Stoxx 50 ETF and €373m Invesco Euro Stoxx 50 ETFs both charging 0.05pc. However, the latter two ETFs both offer investors access to Europe's largest 50 companies, via the Euro Etoxx 50 index, whereas the iShares fund tracks the FTSE Europe ex UK index which covers over 500 companies.

Mr Hughes added: "Investors should always remember that even with tracker funds and ETFs, price shouldn’t be the only factor. The ability to track the index and the index being tracked are just as important. A low price certainly helps, though."