The most expensive tracker funds charge investors more than 20 times the fees of the cheapest option, according to analysis from AJ Bell.
The stark difference in charges can leave investors in the priciest passive funds with a portfolio worth less than that of the cheaper option, even when funds deliver almost identical performance.
IA: Inflows into trackers double in August as fixed income funds revert to outflows
AJ Bell and Morningstar found that investors in the most expensive UK tracker pay fees more than twentyfold that of the cheapest option, with the top end recorded at 1.06%, compared with the cheapest option of 0.05%.
Europe ex UK is the region with the smallest gap between the top and bottom end of fees - just seven basis points' difference - but this is still more than double the lowest-cost option of 0.06%.
AJ Bell noted the most expensive trackers could have initially been priced with a fee covering investment, administration and any financial advice received, but many of the funds have now switched to investment platforms where investors could switch to cheaper fund.
The current rules prevent investment platforms from notifying investors on possible cost savings on passive holdings in their portfolio, as it would be deemed financial advice.
The ongoing Advice Guidance Boundary Review is considering ways to improve the help customers receive, which AJ Bell said "could lead to better consumer outcomes".
AJ Bell: FTSE 100 dividend growth predictions continue to slide
AJ Bell head of investment analysis, Laith Khalaf, said: "It might come as a surprise, but not all tracker funds are created equal. There can be a big gulf in charges, and over time this can produce a seriously large dent in your nest egg if you happen to be invested in a higher cost tracker.
"With no chance of outperformance because they invest passively, the difference in returns between comparable tracker funds will be largely dictated by fees. It therefore makes sense for investors to seek to reduce costs where possible, and sometimes this means voting with your feet and transferring to a new provider.
"At the moment, platform providers can identify customers who hold higher cost tracker funds but cannot contact them to point this out as this could constitute personal financial advice. The regulator is currently reviewing the dividing line between advice and guidance, and this is an example of how relaxing the rules could help investors to make better, more informed decisions."
