Low-cost fund provider Vanguard Asset Management listed five exchange traded funds (ETFs) on the London Stock Exchange this morning.
The ETFs – Vanguard FTSE 100, Vanguard S&P 500, Vanguard FTSE Emerging Markets, Vanguard FTSE All-World and Vanguard UK Government Bond – will all be physically-backed.
Their total expense ratios will range from 0.09 per cent for the S&P 500 ETF, to 0.45 per cent for the emerging market vehicle.
Tom Rampulla, managing director of Vanguard Asset Management, says Vanguard considers ETFs and traditional mutual funds as ‘two sides of the same coin’, and that the new ETFs will be run using the same investment philosophy.
He adds: ‘Both products offer investors a low-cost way to access broadly diversified stock and bond investments.’
Nick Blake, head of retail at Vanguard, hinted that competitors might respond with lower-priced products as a result of the competitive TERs, which he believes would be good news for the industry as a whole.
Vanguard is best-known in the UK for offering cheap index funds, but the provider has been mulling a move into the ETF market for some time.
The firm is owned by the Vanguard Group, which launched the first index mutual fund in the US in 1976. It manages more than $2 trillion in assets worldwide. It currently offers 49 ETFs in the US.
Subscribe to Money Observer Magazine
Be the first to receive expert investment news and analysis of shares, funds, regions and strategies we expect to deliver top returns, plus free access to the digital issues on your desktop or via the Money Observer App.Subscribe now