Vanguard, the US investment fund company made famous by its super-cheap index tracker funds, has launched a new investment platform charging just 15p for every £100 you invest, making it one of the lowest cost ‘fund supermarkets’ in the UK.
This means investors will for the first time be able to buy Vanguard’s signature low-cost index tracking funds directly from the company, as opposed to through an adviser or third-party fund supermarket.
‘Vanguard Investor’ charges a fee of just 0.15% a year, significantly undercutting big-name rival fund supermarkets such as Hargreaves Lansdown and Fidelity, which start charging at 0.45% and 0.35%, respectively.
What does Vanguard’s platform offer?
Vanguard has launched its platform with the following accounts:
Vanguard says it plans to launch a self-invested personal pension (Sipp) in the future. To invest, you’d need a minimum lump sum of £500, or a minimum monthly contribution of £100.
What funds will Vanguard offer?
Vanguard’s platform offers 65 of its funds in total, covering equity funds (which invest in shares), fixed income funds (which invest in corporate bonds and gilts) and ‘blended’ funds, which invest in a mixture of the two.
Vanguard is famed for offering tracker funds – investments which seek to mimic the performance of a stock market index at a lower cost than actively managed funds, which employ a fund manager and research team to pick which shares to include and when to buy and sell.
The platform mostly includes tracker funds and exchange traded funds – but you might be surprised to also see seven actively managed funds available on there.
Annual charges range from 0.06% – 6p for every £100 you invest – for the Vanguard FTSE 100 Index Unit Trust, to 0.80% for the Vanguard Global Emerging Markets Fund.
Unlike most of its rival fund supermarkets, however, individual share trading is not available on the platform.
Is Vanguard’s platform really the cheapest?
According to our analysis, Vanguard has entered the market with one of the very cheapest ways to invest. Its annual platform fee, at 0.15%, is the lowest of the companies that charge an annual percentage fee. It also caps charges at £375 (the amount charged for £250,000).
Someone with £10,000 would pay £15 per year – making it cheaper than any fund supermarket we rate.
Someone with £200,000 would pay £300 annually – meaning that, according to our latest pricing models, only Alliance Trust Savings, Halifax Share Dealing, Interactive Investor and The Share Centre are cheaper. Note that our models also include the price of two trades where applicable – but Vanguard doesn’t charge for trading funds.
How do other fund supermarkets compare?
The chart below shows how other fund supermarkets compare to Vanguard in terms of costs.
- Which? members can log in to see our full pricing analysis for 16 fund supermarkets, and how much it would cost to invest for portfolios between £100 and £500,000. If you’re not a Which? member, take a trial for just £1 for two months today.