Pop­u­lar fund fees fall yet fur­ther

The Daily Telegraph - Your Money - - YOUR MONEY -

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”.

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