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Vanguard cuts fees on UK active fund range

Vanguard, the asset management giant known mainly for its passive offering, has announced a reduction in fees on its UK domiciled active fund range.

Fees on Vanguard Global Equity and Vanguard Global Equity Income funds have been reduced from 0.60 per cent to 0.48 per cent per annum. The price of Vanguard Global Balanced fund, a multi-asset fund holding a 65 per cent/35 per cent mix of equites and fixed income investments, has been reduced from 0.60 per cent to 0.48 per cent.

The price of Vanguard Global Emerging Market fund has come down from 0.80 per cent to 0.78 per cent.

The charges conundrum: Are fund managers playing fair with their admin fees?

Vanguard head of UK distribution Robyn Laidlaw says: “We are pleased to reduce the price of our UK active fund range. Although widely known as a pioneer in index fund investing, active management has been a part of Vanguard’s approach since our founding in 1975.

“With over £1trn in active strategies (as at 30 April 2019) managed on behalf of investors globally, Vanguard’s active funds aim to provide stability, experience and a focus on long-term, low-cost investing to give investors the best chance of investment success.”

The move drew a positive response from Shore Financial Planning director Ben Yearsley who heard the announcement at the Vanguard conference today: “It’s a welcome move. There has been huge fee pressure on passive over the last decade, but active has been largely immune. Vanguard were one of the key drivers behind passive price falls and they may well be the architects behind falling active prices as well.

“Platforms sending out cost statements recently highlighted how much active funds cost in pounds and pence and frankly too many active funds are too expensive for the added alpha being generated.”

 

Fund Name Managers Ongoing charge figure as at 19 June 2019
Vanguard Global Equity Fund Baillie Gifford, Wellington Management Company 0.48%
Vanguard Global Equity Income Fund Wellington Management Company, Vanguard Quantitative Equity Group 0.48%
Vanguard Global Balanced Fund Wellington Management  Company 0.48%
Vanguard Global Emerging Market Fund Baillie Gifford, Pzena Investment Management, Oaktree Capital Management 0.78%

Source: Vanguard

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