Popular fund fees fall yet further
Leading global index-tracking investment firm Vanguard has cut the ongoing charge on its highly popular LifeStrategy fund range for the third time since 2011.
The annual fee is being cut from 0.24pc to 0.22pc across all five of the funds, which have attracted £5bn since launching in 2011.
In total, the cut is equivalent to £1m in annual fees based on the current amount invested.
The LifeStrategy funds are globally diversified “passive” portfolios, intended to be an all-inone option for investors.
They offer varying mixes of shares and bonds, ranging from 20pc to 100pc investment in shares.
Robyn Laidlaw, of Vanguard, said that as the funds attract more money and benefit from economies of scale, the company will continue to lower costs for investors.
Globally, Vanguard was the most popular fund manager in the world last year by a substantial margin.
It attracted nearly $200bn in new money in 2016, more than its nearest 10 rivals – including giants Fidelity and BlackRock. The group now manages more than $3trillion.
Low cost passive investing has surged in recent years, while the fees charged by active fund managers have come under heavy scrutiny.
The City watchdog released a damning report last year, warning that, on average, “actively managed investments do not outperform their benchmarks after costs”.