Vanguard slashes fees across ETF and index range

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:

ETFs Old OCF New OCF
FTSE All-World UCITS ETF 0.25% 0.22%
FTSE Developed Asia Pacific ex Japan UCITS ETF 0.22% 0.15%
FTSE Developed Europe ex UK UCITS ETF 0.12% 0.10%
FTSE Developed Europe UCITS ETF 0.12% 0.10%
FTSE Developed World UCITS ETF 0.18% 0.12%
FTSE Emerging Markets UCITS ETF 0.25% 0.22%
FTSE Japan UCITS ETF 0.19% 0.15%
EUR Corporate Bond UCITS ETF 0.12% 0.09%
EUR Eurozone Government Bond UCITS ETF 0.12% 0.07%
UK Gilt UCITS ETF 0.12% 0.07%
USD Corporate 1-3 Year Bond UCITS ETF 0.15% 0.09%
USD Corporate Bond UCITS ETF 0.12% 0.09%
USD Treasury Bond UCITS ETF 0.12% 0.07%

 

Index Funds Domicile Old OCF New OCF
Emerging Markets Stock Index Fund Ireland 0.27% 0.23%
Global Small-Cap Index Fund Ireland 0.38% 0.29%
Japan Stock Index Fund Ireland 0.23% 0.16%
Pacific ex-Japan Stock Index Fund Ireland 0.23% 0.16%
SRI European Stock Fund Ireland 0.30% 0.16%
SRI Global Stock Fund Ireland 0.35% 0.22%
Euro Government Bond Index Fund Ireland 0.25% 0.12%
Euro Investment Grade Bond Index Fund Ireland 0.30% 0.12%
Global Corporate Bond Index Fund Ireland 0.25% 0.18%
Global Short-Term Corporate Bond Index Fund Ireland 0.25% 0.18%
Japan Government Bond Index Fund Ireland 0.25% 0.12%
UK Government Bond Index Fund Ireland 0.15% 0.12%
UK Investment Grade Bond Index Fund Ireland 0.15% 0.12%
UK Short-Term Investment Grade Bond Index Fund Ireland 0.15% 0.12%
US Government Bond Index Fund Ireland 0.25% 0.12%
US Investment Grade Credit Index Fund Ireland 0.30% 0.12%
FTSE Developed World ex-UK Equity Index Fund UK 0.15% 0.14%
FTSE Global All Cap Index Fund UK 0.24% 0.23%
FTSE UK All Share Index Unit Trust UK 0.08% 0.06%
FTSE UK Equity Income Index Fund UK 0.22% 0.14%
UK Inflation-Linked Gilt Index Fund UK 0.15% 0.12%
UK Long Duration Gilt Index Fund UK 0.15% 0.12%

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