Unlock Editor’s Digest Lock for Free
FT editor Roula Khalaf will select your favorite stories in this weekly newsletter.
Vanguard, the world’s second-largest asset manager, cuts fees for almost half of its bond exchange funds, almost half of its European funds.
The US-based asset manager, which oversees more than 10.5 tons worldwide, is looking to cut fees for seven of the 15 total 15 ETFs in Europe, attracting more customers to bond funds and gaining greater market share.
Seven funds ranging from ETFs tracking UK guilts to emerging market government bonds reduce the ongoing fees by two basis points. Vanguard estimates that investors’ total savings will be around $3.5 million a year.
The change means Vanguard’s average asset-weighted expense ratio across European bond indexes and a actively managed fund range.
The move comes as Vanguard along with Vanguard, including BlackRock and State Street, Jostles for dominance, as ETF’s biggest global providers.
Vanguard CEO Salim Ramji told the Financial Times last September that he was planning a new push into the bond market, citing “extraordinary” inefficiencies and opportunities.
He said expanding the size of companies in bonds is a priority, and expanding their business beyond providing core equity is a priority.
“The bond market is currently twice the size of the stock market, but remains unclear and expensive. Investors deserve better,” said John Cleborn, head of Vanguard in Europe.
He added that the asset manager plans to expand its bond products over the coming months.
Debbie Fuhr, founder of research firm ETFGI, said:
“There’s clearly been a movement to invest in low-cost products. As assets increase, we can afford to cut our fees.”
Earlier this year, Vanguard announced the “largest fee reduction” in US history. This estimated that investors could save more than $350 million in 2025.
Last year, Vanguard overhauled fees on its UK investment site. This led to some DIY investors paying more, managed service clients pay less, and new fees of £4 per month.
The changes are intended to help the company “risking” in “risking” in which it serves customers who choose to invest in, Vanguard aims to encourage less experienced investors to manage the funds.
