The launch of a US investment group in the UK may herald the dawn of cheaper fund management charges for British investors
The ultra low-cost US mutual fund group Vanguard has announced its intentions to launch into the already crowded UK market.
It gained fame for bargain tracker funds with fees that are a fraction of the cost of traditional rivals.
The group, which manages more than $1.1 trillion in assets and serves more than 23m individual and institutional accounts worldwide, has made a name for itself across the Atlantic for selling low-cost funds.
Investors reportedly poured some $84bn of new money into Vanguard products in 2008.
Subject to regulatory approval, Vanguard is expected to launch a range of index tracking funds later in 2009.
Martin Bamford, of Informed Choice, an independent financial adviser, says: 'This has the potential to be a very healthy addition to the UK fund management industry from a competition perspective.
'If investors can get cheaper access to tracker funds, then that is a good thing.'
Presently Vanguard offers some 200 funds to US investors.
As well as running actively managed funds, the group has portfolios tracking indices such as the FTSE 100 in the UK, and the Dow Jones and S&P 500 in the US.
Vanguard was established in 1974 by John Bogle and it made its name with tracker funds – investments that mirror the performance of a particular index or market.
As such the success of the fund is dependent upon the fortunes of the index it is tracking. If the index rises, so will the fund's value but the reverse is also true.
Advisers are hopeful that its arrival in Britain could spur-on a price war between UK-based fund managers.
The average Vanguard index fund carries an annual charge of 0.15%, substantially less than the fees on UK index funds, which can range from between 0.7% to 1%. In addition, the group's mean annual expense ratio for all of its portfolio funds is just 0.2%, a miniscule figure compared with an average of 1.5% for actively-managed funds in the UK.
And this low cost is before extra administration costs are thrown into the mix, which annual management charges figures do not usually include. In some cases these mean the total expense ratio (TER) can creep up to nearer to 2%. Vanguard's TERs tend to be quite low. Its European Stock Index Investor fund has a TER of 0.5% while its US 500 Stock Index Investor's TER is just 0.38%.
In stark contrast, the Legal & General UK 100 tracker charges 0.75% and has a TER of 0.84% according to Informed Choice. The Virgin UK Index Tracker levies a TER of 1% On the other hand, Fidelity's All-Share tracker - its MoneyBuilder UK fund charges 0.1% a year but its TER is just 0.27%.
It gained fame for bargain tracker funds with fees that are a fraction of the cost of traditional rivals.
The group, which manages more than $1.1 trillion in assets and serves more than 23m individual and institutional accounts worldwide, has made a name for itself across the Atlantic for selling low-cost funds.
Investors reportedly poured some $84bn of new money into Vanguard products in 2008.
Subject to regulatory approval, Vanguard is expected to launch a range of index tracking funds later in 2009.
Martin Bamford, of Informed Choice, an independent financial adviser, says: 'This has the potential to be a very healthy addition to the UK fund management industry from a competition perspective.
'If investors can get cheaper access to tracker funds, then that is a good thing.'
Presently Vanguard offers some 200 funds to US investors.
As well as running actively managed funds, the group has portfolios tracking indices such as the FTSE 100 in the UK, and the Dow Jones and S&P 500 in the US.
Vanguard was established in 1974 by John Bogle and it made its name with tracker funds – investments that mirror the performance of a particular index or market.
As such the success of the fund is dependent upon the fortunes of the index it is tracking. If the index rises, so will the fund's value but the reverse is also true.
Advisers are hopeful that its arrival in Britain could spur-on a price war between UK-based fund managers.
The average Vanguard index fund carries an annual charge of 0.15%, substantially less than the fees on UK index funds, which can range from between 0.7% to 1%. In addition, the group's mean annual expense ratio for all of its portfolio funds is just 0.2%, a miniscule figure compared with an average of 1.5% for actively-managed funds in the UK.
And this low cost is before extra administration costs are thrown into the mix, which annual management charges figures do not usually include. In some cases these mean the total expense ratio (TER) can creep up to nearer to 2%. Vanguard's TERs tend to be quite low. Its European Stock Index Investor fund has a TER of 0.5% while its US 500 Stock Index Investor's TER is just 0.38%.
In stark contrast, the Legal & General UK 100 tracker charges 0.75% and has a TER of 0.84% according to Informed Choice. The Virgin UK Index Tracker levies a TER of 1% On the other hand, Fidelity's All-Share tracker - its MoneyBuilder UK fund charges 0.1% a year but its TER is just 0.27%.
It just look like that you are new to blogging but you have well managed it. But you have very few posts. Try to arrange or make a different Template which look like your blog. and do more posts on daily bases. At least one post a day. I think you have to put more posts about your blog about your self and about forex like forex trading and analysis, sports and traveling busses and etc..!
ReplyDeleteThis are my blogs just look at these blogs and see how i managed them. I am not saying that i am an expert of of blogging but i can say that to get traffic you need to do very hard work.
http://www.bollywood103.blogspot.com/
http://www.global-banks.blogspot.com/
http://www.latest-cameras.blogspot.com/
http://www.intelprocessor2015.blogspot.com/
http://www.peoplestudentfederation.blogspot.com/