Vanguard has published its second annual report assessing the value that it provides to investors in its UK funds.
The report, which assesses 30 funds available to UK investors in the year ending 30 September 2020, looked at their value in terms of more than just cost. It also evaluated their performance and other benefits provided to investors, including quality of service and transparency of pricing1.
All fund managers must carry out an annual assessment of the value they provide to investors, looking at seven criteria set by the Financial Conduct Authority (FCA), the regulator2. The aim is to strengthen the duty of fund managers to act in investors’ best interests.
Here are our key findings:
- The ongoing charges for our funds were, on average, 75% cheaper than the average ongoing charges figure (OCF) for their respective Morningstar categories3.
- The performance of 97% of our funds achieved a green rating, meaning that they provided good performance relative to their investment objectives4.
- The investors in our UK funds benefit from a world-class global infrastructure, well-resourced investment teams and a depth of experience at a price that represents significant value.
- The share-class structures of our funds are simple and our pricing is transparent, allowing investors to make informed choices. We do not offer expensive share classes that have commission built into the pricing and we further simplified our pricing in June 2020.
The report comes as Vanguard has been ranked first for delivering value in a survey of individual investors by Boring Money, an independent ratings and review website. It surveyed more than 6,500 advised and non-advised fund investors in 2020, asking which asset managers they felt were delivering best value and why.
Overall conclusion of the report
Vanguard has always been committed to providing value to investors. Our second report concludes that we delivered value to investors in our UK funds in the year ending 30 September 2020. However, we are not standing still and will continue to monitor our funds on a regular basis, recognising that there is always room for improvement.
For more information see our assessment of value report.
1 The report does not assess the value provided by the UK Personal Investor platform itself, only the UK-domiciled funds available on that platform.
2 The criteria are: performance, general costs of the fund, economies of scale, comparable market rates, comparable services, share classes and quality of service.
3 Comparison of ongoing charges relative to comparable share class of direct peers in their respective Morningstar category. Source: Morningstar as at 30 September 2020.
4 Source: Vanguard, from 1 October 2019 to 30 September 2020.
Investment risk information:
The value of investments, and the income from them, may fall or rise and investors may get back less than they invested.
Past performance is not a reliable indicator of future results.
Other important information:
This article is designed for use by, and is directed only at persons resident in the UK.
The information contained in this document is not to be regarded as an offer to buy or sell or the solicitation of any offer to buy or sell securities in any jurisdiction where such an offer or solicitation is against the law, or to anyone to whom it is unlawful to make such an offer or solicitation, or if the person making the offer or solicitation is not qualified to do so. The information in this document does not constitute legal, tax, or investment advice. You must not, therefore, rely on the content of this document when making any investment decisions.
Issued by Vanguard Asset Management Limited, which is authorised and regulated in the UK by the Financial Conduct Authority.
© 2021 Vanguard Asset Management Limited. All rights reserved.