Adding to its beefed-up head count, Vanguard’s UK arm is listing new share classes of three of its biggest-hitting core ETFs in London.
Vanguard FTSE 100 UCITS ETF (VUKG) – 0.09% (Accumulating)
Vanguard FTSE 250 UCITS ETF (WMIG) – 0.10% (Accumulating)
Vanguard S&P 500 UCITS ETF (VUAA) – 0.07% (Accumulating)
All of the funds will use physical replication. The indexes they track should be entirely familiar.
Analysis - Vanguard UK, will it follow the US?
While Vanguard in the US has a highly developed ETF arm, in the UK it is still beginning to bloom. Vanguard by reputation is more retail focussed (although Vanguard does have institutional sales people) and this is reflected in its low unit costs (units in Vanguard's FTSE 100 ETFs cost £30 each; units iShares ISF costs a massive £740 each), as well as their product suite, which is rounded together to form model portfolios.
Yet UK retail investors are a bit different from their US peers. Your stereotypical UK retail investor is someone who lives in the home counties or southwest, reads the Daily Telegraph, votes Tory and has an ISA. They often like investment trusts (closed ended funds) that are backed by big personalities, your Neil Woodfords of the world, whose investment approach they can relate to. Your stereotypical English retailer is still somewhat sceptical of index investing, which is Vanguard's core offering. But this is starting to change, and none too soon.
Another reason, perhaps, for Vanguard being smaller is it has simply been more discriminating in how many funds it lists. Whereas other providers will lay out many buckets to collect rain, Vanguard will only do so if they know in advance a fund will have demand in the adviser market.
# of ETFsVanguard27LGIM33WisdomTree90Invesco153Amundi174Lyxor215Xtrackers251iShares394
Nonetheless it will be very interesting to watch Vanguard in the UK going forward. And particularly interesting to see if they can replicate their American success across the pond.