Industry Updates

Vanguard slashes fees across ETF and index range

George Geddes

stacks of coins on a table

Vanguard has laid down the gauntlet to its rivals in Europe by reducing the ongoing charges for 13 ETFs and 22 index funds.

The firm’s full line-up in the UK including ETFs, index funds and its actively managed fund range have an average ongoing charges figure (OCF) of 0.20%. The ETF index line-up has an average OCF of 0.10%.

Vanguard is in competition with the likes of BlackRock which cut its fees on 12 index funds in August and DWS slashing the costs for five of its core fixed income ETFs earlier this year.

The latest drop in fees is Vanguard’s bid to argue against the misconception that the more you pay for an investment, the better it performs.

Vanguard has also included the Vanguard Sterling Short-Term Money Market fund in the latest round of fee cuts, falling from 0.15% to 0.12%.

Why the hype around fee cuts is overdone

Sean Hagerty, head of Vanguard for Europe, commented: “For too long investors have been poorly served with high-cost, complex investments.

“More work needs to be done to ensure investors understand the impact of costs on investment returns. Investors cannot control the markets, but they can control the fees they pay.”

Vanguard’s reduced investment products include:

ETFsOld OCFNew OCFFTSE All-World UCITS ETF0.25%0.22%FTSE Developed Asia Pacific ex Japan UCITS ETF0.22%0.15%FTSE Developed Europe ex UK UCITS ETF0.12%0.10%FTSE Developed Europe UCITS ETF0.12%0.10%FTSE Developed World UCITS ETF0.18%0.12%FTSE Emerging Markets UCITS ETF0.25%0.22%FTSE Japan UCITS ETF0.19%0.15%EUR Corporate Bond UCITS ETF0.12%0.09%EUR Eurozone Government Bond UCITS ETF0.12%0.07%UK Gilt UCITS ETF0.12%0.07%USD Corporate 1-3 Year Bond UCITS ETF0.15%0.09%USD Corporate Bond UCITS ETF0.12%0.09%USD Treasury Bond UCITS ETF0.12%0.07%

Index FundsDomicileOld OCFNew OCFEmerging Markets Stock Index FundIreland0.27%0.23%Global Small-Cap Index FundIreland0.38%0.29%Japan Stock Index FundIreland0.23%0.16%Pacific ex-Japan Stock Index FundIreland0.23%0.16%SRI European Stock FundIreland0.30%0.16%SRI Global Stock FundIreland0.35%0.22%Euro Government Bond Index FundIreland0.25%0.12%Euro Investment Grade Bond Index FundIreland0.30%0.12%Global Corporate Bond Index FundIreland0.25%0.18%Global Short-Term Corporate Bond Index FundIreland0.25%0.18%Japan Government Bond Index FundIreland0.25%0.12%UK Government Bond Index FundIreland0.15%0.12%UK Investment Grade Bond Index FundIreland0.15%0.12%UK Short-Term Investment Grade Bond Index FundIreland0.15%0.12%US Government Bond Index FundIreland0.25%0.12%US Investment Grade Credit Index FundIreland0.30%0.12%FTSE Developed World ex-UK Equity Index FundUK0.15%0.14%FTSE Global All Cap Index FundUK0.24%0.23%FTSE UK All Share Index Unit TrustUK0.08%0.06%FTSE UK Equity Income Index FundUK0.22%0.14%UK Inflation-Linked Gilt Index FundUK0.15%0.12%UK Long Duration Gilt Index FundUK0.15%0.12%

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