Vanguard reduces initial charge on 10 retail funds

Vanguard has reduced the initial charge across 10 of its onshore retail open-ended tracker funds.

The ‘pre-set dilution levy’ that the firm charges new investors in its funds, which pays for the cost of creating the new units and investing the money in the market, has been reduced by between 0.06 per cent and 0.25 per cent.

The reduction has occurred on Vanguard’s multi-asset LifeStrategy funds, which now have a dilution levy of 0.1 per cent, and across four fixed income tracker funds.

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The firm said it had decreased the levy following recent analysis that found those funds had “experienced decreased market trading expenses” and that costs had decreased as the funds’ assets grew.

Adam Laird, passive investment manager at Hargreaves Lansdown, said: “For months the cost of investing has been falling, as competition drives down charges and the government’s removal of stamp duty feeds through to investors.

“By lowering the levy, more of investors’ money will go into funds, which is great news. The effect of charges is compounded and even small reductions can make a meaningful difference for investors.”

FundOngoing charge (unchanged)Previous levyNew levy
Vanguard U.K. Long Duration Gilt Index 0.15%0.1%Zero

Vanguard U.K. Inflation-Linked Gilt Index

Vanguard Euro Investment Grade Bond Index0.3%0.4%0.3%

Vanguard U.K. Investment Grade Bond Index


Vanguard U.K. Short-Term Investment Grade Bond Index

Vanguard LifeStrategy 20% Equity 0.29%0.18%0.1%
Vanguard LifeStrategy 40% Equity 0.29%0.17%0.1%
Vanguard LifeStrategy 60% Equity 0.29%0.17%0.1%
Vanguard LifeStrategy 80% Equity 0.29%0.17%0.1%
Vanguard LifeStrategy 100% Equity 0.29%0.16%0.1%