Vanguard has launched four active ETFs for the UK market.
The ETFs will have a factor-based investment strategy and be exposed to value, momentum, liquidity and minimum volatility.
The funds will be managed by Vanguard’s quantitative equity group, currently managing $24bn (£16bn) in assets.
The ongoing charge for the funds is 0.22 per cent, with Axel Lomholt, head of product for Vanguard’s international business, saying the ETFs offer a good alternative to higher-cost active strategies run to similar mandates.
The launches are Vanguard’s first active ETFs on the London Stock Exchange, which the firm says “reinforces Vanguard’s commitment to offering UK investors high-value, low-cost active and index funds”.
The asset manager already runs more than $1trn of active assets in the US.
“There is a significant amount of empirical research that has found exposure to factors, such as value, momentum, liquidity and volatility, could offer investors attractive premiums over the long term,” says John James, managing director for Vanguard in Europe.
The Vanguard Global Value Factor Ucits ETF will target low-valued stocks, while the Vanguard Global Momentum Factor Ucits ETF will focus on stocks with strong recent share price performance, looking at the previous 12 months.
The Vanguard Global Liquidity Factor Ucits ETF will target stocks that are less frequently traded, while the Vanguard Global Minimum Volatility Ucits ETF will target stocks with lower volatility to aim to deliver better risk-adjusted returns.