Vanguard cuts fees on 35 passive funds and ETFs

More good news for those looking to build low-cost portfolios with simple tracker products.

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  1. Rob Morgan

Passively managed investments continue to put pressure on charges across the investment industry – great news for investors seeking to build their own low-cost portfolios. The latest development is a cut in annual fees by Vanguard across its popular Exchange Traded Fund (ETF) and fund range.

In contrast to ‘active’ funds that employ fund managers to try and select the best-performing investments, passive investments or ‘trackers’ simply aim to replicate the returns of an index, say, the FTSE 100. The competition across the industry for this type of product is fierce, with some of the world’s largest asset managers including BlackRock (iShares), Fidelity and Vanguard vying to provide the lowest-cost products to investors.

Fees on 13 Vanguard exchange traded funds available to UK retail investors have been cut by between 0.02% and 0.07%, while 22 index tracking funds have seen fees reduced by between 0.01% and 0.18% as measured by the OCF or ongoing charges figure.

The key difference between an ETF and a traditional fund such as a Unit Trust or OEIC is that ETFs are traded on a stock exchange, just like company shares. This means that they are constantly priced during market hours rather being priced just once a day. However, you need to factor in any fees for share dealing when buying and selling ETFs.

Table: Vanguard ETFs fee reductions

Table: Vanguard fund fee reductions

Each of these investments is available via Charles Stanley Direct subject to applicable platform charges and, in the case of ETFs, dealing costs. Please note the web page for each fund uses a more comprehensive charges figure relating to fund costs, the Total Ongoing Charges (TOC). This includes the Ongoing Charges Figure plus any transaction and incidental costs incurred by the fund.

Past performance is not a reliable guide to future returns. This website is not personal advice based on your circumstances. No news or research item is a personal recommendation to deal. Investment decisions in fund and other collective investments should only be made after reading the Key Investor Information Document or Key Information Document, Supplementary Information Document and Prospectus. If you are unsure of the suitability of your investment please seek professional advice.

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