Vanguard Reducing Fees

Rheumatoid

https://www.vanguardinvestor.co.uk/articles/latest-thoughts/investing-success/fee-cuts-show-vanguard-commitment?cmpgn=ET1019UKPALBR0001

Every little helps

Are we seeing a price war?

Thrugelmir

Weren't Vanguard more expensive than Blackrock ?

Timely PR given the woes of HL as well. As going to be lots of disgruntled investors.

Alexland

Thrugelmir wrote: »

Weren't Vanguard more expensive than Blackrock ?

Depends on the investment. For example on a Developed World ETF then Blackrock's accumulating SWDA is 0.20% and Vanguard have just reduced their distributing VEVE from 0.18% to 0.12% to match Lyxor's accumulating LCWL. Still the liquidity and bid/ask spread on SWDA is still best. We hold all 3 across our various accounts. I have done some rough maths and this Vanguard reduction is going to save us around £150 pa.

Alex

MK62

It may be interesting to see if there's a reduction in the OCF of the Lifestrategy fund of funds series, being as many of the underlying funds which make up the series have had their OCF reduced.

Alexland

Vanguard seem very well prepared for this reduction and all the relevant fund pages have been updated so we can only assume they have increased the master VLS fund fee to cover the reduction in underlying fund costs such that the weighted total OCF remains 0.22%. I can only presume they see less reason to be more competitive on multi asset funds.

stehouk

Alexland wrote: »

Depends on the investment. For example on a Developed World ETF then Blackrock's accumulating SWDA is 0.20% and Vanguard have just reduced their distributing VEVE from 0.18% to 0.12% to match Lyxor's accumulating LCWL. Still the liquidity and bid/ask spread on SWDA is still best. We hold all 3 across our various accounts. I have done some rough maths and this Vanguard reduction is going to save us around £150 pa.

Alex

I'm struggling with this, i cannot find a translation, is this in english :rotfl:

MK62

Alexland wrote: »

Vanguard seem very well prepared for this reduction and all the relevant fund pages have been updated so we can only assume they have increased the master VLS fund fee to cover the reduction in underlying fund costs such that the weighted total OCF remains 0.22%. I can only presume they see less reason to be more competitive on multi asset funds.

It would make their claim of no double charges on their fund of funds series (such as Lifestrategy), seem a little hollow though......;)

talexuser

Very nice reductions on my VERX and VJPN, none on VNRT but that was 0.1 anyway.

Alistair31

Shame they still don’t have VWRP on their own platform.

bowlhead99

MK62 wrote: »

It may be interesting to see if there's a reduction in the OCF of the Lifestrategy fund of funds series, being as many of the underlying funds which make up the series have had their OCF reduced.

MK62 wrote: »

Alexland wrote: »

Vanguard seem very well prepared for this reduction and all the relevant fund pages have been updated so we can only assume they have increased the master VLS fund fee to cover the reduction in underlying fund costs such that the weighted total OCF remains 0.22%. I can only presume they see less reason to be more competitive on multi asset funds.

It would make their claim of no double charges on their fund of funds series (such as Lifestrategy), seem a little hollow though......;)

There are no 'double charges'. The price you see for Lifestrategy is the price you pay.

If you construct your portfolio yourself out of their underlying products and do all your own rebalancing you can 'build your own lifestrategy portfolio' with lower cost exposure (but more hassle) than buying their off-the-shelf portfolio fund. That has always been the case.

If Vanguard are using the Lifestrategy fund's money to invest into another Vanguard OEiC product they will probably not be using the retail 'Investor' share class with the new lowered price anyway. There is a cheaper 'institutional plus' share class for many of the underlying funds, if you've got £200m to invest. And presumably even if the VLS60 ACC fund only wants to invest £130m into the Vanguard Japan Stock Index Fund ACC class, the manager will waive the minimum requirement and still allow them to use the cheaper version offered to large institutions and industry friends.

Alexland

Yes they may have a private zero fee unit class of their funds to enable the whole 0.22% management fee to be deducted from the VLS fund.

Similarly there were very minor fee reductions on their All World and All Cap products suggesting the competition is in the building blocks from the likes of Lyxor Core ETFs. This makes it more attractive to run your own multi fund portfolio.

Alex