Vanguard cuts passive portfolio fund costs


Vanguard has moved to cut its fund costs by removing the upfront fee on its £2bn LifeStrategy range.

The fund house previously charged a 0.1 per cent dilution levy on the range of five model portfolios, but has now removed this fee. The ongoing charge figure for each of the funds is 0.24 per cent.

Vanguyard head of retail Nick Blake says: “As our funds grow in size and we broaden our presence in the UK, we will continue to leverage operating efficiencies and use our increasing scale to lower costs for investors.

“The levy was designed to offset transaction costs such as those generated by local taxes or wide dealing spreads in illiquid underlying assets. All fees were paid directly to the relevant fund for the benefit of existing investors.”

The move follows BlackRock’s decision earlier this week to cut the fees on five of its most popular tracker funds, halving the fee on some of the funds.

The Vanguard LifeStrategy funds use passives in the model portfolios across different risk profiles, which range from 20 per cent equities to 100 per cent equities.