Vanguard expands ETF range, cuts fees
Vanguard has added three exchange-traded funds (ETFs) to its existing offering of four ETF products, and has also significantly decreased the management fees on its two existing Australian ETFs.
The new products include a high-yield ETF based on the FTSE ASFA Australian high dividend yield index, which contains a basket of around 60 stocks, with an annual fee of 25 basis points.
The firm also announced a large cap ETF based on the MSCI Australian large cap index which covers the top 70 per cent market capitalisation of the Australian share market with a fee of 0.20 per cent; as well as a small cap ETF based on the MSCI Australian small cap index covering the bottom 15 per cent of the market with a fee of 0.30 per cent.
Vanguard also announced it would be reducing the fees on its Australian shares ETF from 0.27 per cent to 0.15 per cent, and on its property securities ETF from 0.34 per cent to 0.25 per cent.
On the firm’s measured approach to releasing new ETF products, Vanguard’s principal, corporate affairs and development, Robin Bowerman, said he didn’t think it was necessarily a fantastic idea to be rapidly releasing large numbers of new ETF products. But he also said the firm would continue to look at new products, including potentially fixed income ETFs, with a view to adding some more products down the track.
The new and existing products are targeted at both institutional retail investors, but so far the majority of the firm’s ETF growth in Australia has been through both advised and non-advised self-managed super funds, and direct high-net-worth investors, Bowerman said.
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