Vanguard reduces FI fund fees

30 September 2021
| By Chris Dastoor |
image
image
expand image

Vanguard has reduced the fees of its Australian Fixed Interest Index and Australian Corporate Fixed Interest Index managed funds and exchange traded funds (ETFs).

The changes, which would take effect from 1 October, had been achieved as the firm was able to achieve “efficiencies of scale” as the funds grew in assets under management, Vanguard said.

 

 

Summary of fee changes

Fund/ETF

Current %

New %

Vanguard Australian Fixed Interest Index ETF

0.20

0.15

Vanguard Australian Fixed Interest Index Fund

0.24

0.19      

Vanguard Australian Corporate Fixed Interest Index ETF

0.26

0.20

Vanguard Australian Corporate Fixed Interest Index Fund

0.29

0.24

Source: Vanguard

According to FE Analytics, within the Australian Core Strategies universe, the fixed interest diversified credit sector had an average annualised return of 4.35% over the three years to 31 August, 2021.

Including fees, the Australian Corporate Fixed Interest Index fund returned 4.4%, the Australian Fixed Interest Index ETF returned 4.33%, while the Australian Corporate Fixed Interest Index ETF and Australian Fixed Interest Index both returned 4.28%.

Total return of Vanguard fixed income funds over three years to 31 August 2020

Evan Reedman, Vanguard Australia’s head of product, said: “Persistently low yields have led some investors to question the role of bonds in a long-term financial plan, potentially overlooking the key function of bonds in a well-diversified portfolio.

“As a defensive asset, bonds serve to cushion an investment portfolio and can help smooth out an otherwise anxiety-inducing ride during periods of market volatility.

“And if there is one lesson to be learnt from the last 18 months, it is that uncertainty induced volatility is here to stay.

“For advisers, having lower cost, high quality fixed interest choices available in this environment is critical to ensure they can continue to harness the critical role of bonds and effectively diversify client portfolios.”

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

GG

So shareholders lose a dividend plus have seen the erosion of value. Qantas decides to clawback remuneration from Alan ...

2 months 1 week ago
Denise Baker

This is why I left my last position. There was no interest in giving the client quality time, it was all about bumping ...

2 months 2 weeks ago
gonski

So the Hayne Royal Commission has left us with this. What a sad day for the financial planning industry. Clearly most ...

2 months 2 weeks ago

A Sydney-based financial adviser has been banned from providing financial services in the interest of consumer protection after failing to act on conduct concerns. ...

3 weeks 6 days ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

1 day 4 hours ago

ASIC has cancelled the AFSL of a $250 million Sydney fund manager, one of two AFSL cancellations announced by the corporate regulator....

3 weeks 4 days ago