Vanguard will begin selling eight equity index funds and three fixed income funds in the UK as of tomorrow June 23rd (announcement here). This will bring the lowest cost fund competitor to the British public. Vanguard's annual Total Expense Ratios of the various funds vary from 0.15 to 0.55%, less even than the range of iShares ETFs - list on Stock Encyclopedia - (e.g. the Japan Vanguard fund will have a TER of 0.3% while the iShares ETF has a TER of 0.59%) or OEIC tracker funds like the M&G UK All-Share Equity Index Tracker (TER of 0.49% compared to Vanguard's 0.15%) which also serve the passive index investor. It will be interesting to see how much sales commission, if any, gets charged against a purchase of the new Vanguard funds in the fund supermarkets such as Hargreaves & Lansdown, Fidelity UK and FundsDirect where the DIY investor will be able to buy the funds. The M&G Tracker funds have no sales charge.
Admittedly Canada is not as large a market as the UK, but with the expense ratios of Canadian mutual funds being even higher, is it not time for Vanguard to enter the Canadian market? Vanguard's comment today when I asked: "At this time, Vanguard does not have plans to launch funds in Canada."
Acknowledgements to the Telegraph where I found this item.
Monday, 22 June 2009
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