The company is part of the US-based Vanguard Group, which was founded in 1975. It established the first index tracker fund in the US the following year and is best known for its tracker funds, but also provides actively managed funds and exchange traded funds in the US.
Vanguard’s initial offering to the UK comprises tracker funds that will be distributed mainly through wraps and fund platforms used by fee-based advisers. The company believes regulation and customer demand is driving the demand for fee-based advice in the UK as it has in the US.
Vanguard’s passively-managed funds cover a global range of equity and bond markets and are designed to provide the building blocks for a diversified portfolio at very low cost. In line with Vanguard’s tradition of transparency, fees are clearly disclosed.
The minimum for direct investments with Vanguard is £100,000, but the company expects most of its UK business to come through the wraps and platforms offering the funds, such Ascentric and Transact, which have their own smaller investment minimums.
Some of the funds are UK Oeics and some are Dublin-based. The company decided to offer a mix of onshore and offshore funds after it looked at tax efficiency, costs, economies of scale, and the ability to implement its investment strategy.
The initial range provides a good spread of markets and could be useful for clients of fee-based advisers who want cheap exposure to these markets or passive strategies to complement actively managed funds in their portfolio. However, not all advisers are fee-based and some others will use platforms that do not currently offer the Vanguard range.