100 Club Awards 2014: Passive Investment Group

Vanguard Asset Management

Launched in the US in 1975 by Jack Bogle, Vanguard Group sees its ownership structure as a differentiating feature. Instead of being publicly traded or owned by a small group of individuals, it is owned by the company’s own US-domiciled funds and ETFs in a ‘mutual’ structure.

After initially focusing on the US market, it launched its UK entity in 2009 and rolled out its first mutual funds in the middle of that year.

The index funds available to UK investors are domiciled in both the UK and Ireland, with the fund domicile based upon criteria such as tax efficiency, costs, economies of scale and the ability to implement its investment strategies.

Vanguard expanded its UK business in 2012 with the launch of a series of European exchange-traded funds, an asset class that forms a core part of its US business. Its UK business now offers roughly 11 equity index funds and a similar number of bond index funds, while its ETF range has approximately 13 vehicles, tracking both regional equity indices and UK government bonds.

In August it reduced the ongoing charges on 16 index funds, four ETFs and five LifeStrategy funds, which it said reflected its “mission to lower the cost of investing”. Effective from September 1, the company noted ongoing charges on certain index mutual funds range from 0.08-0.38 per cent, while the ETF ongoing charges range from 0.07-0.29 per cent.

What the judges say

The judges said this passive provider is as cheap as chips and ethically structured.

Club members

BlackRock

iShares

L&G

ETF Securities

In numbers

2009

Vanguard launches UK entity in London

$2.9trn

Global assets under management for all companies within Vanguard Group

0.08%

Lowest ongoing charge for certain Vanguard mutual index funds