First 50 Funds update: Vanguard cuts its fund charges

19 January 2017

Passive investment company Vanguard has cut the fund charges on five of its Life Strategy tracker funds – three of which are among our First 50 Fund picks for beginners.

One of the points raised in the tussle between active versus passive funds is that management fees for the latter are much cheaper – and following Nutmeg’s recent fees shake-up, Vanguard is getting in on the action too.

The cuts concern its Life Strategy funds, of which there are five – 20% Equity Fund, 40% Equity Fund, 60% Equity Fund, 80% Equity fund and 100% Equity Fund – three of which are Moneywise First 50 Funds (20%, 60% and 100%).

It will see fund fees falls from 0.24% to 0.22% across the board – for both new and existing investors.


This amount may not seem like a lot, but over time it adds up, and what amounts to a price war amongst fund providers can only be a good thing for the consumer.

Since June 2011 when the Vanguard index funds were first launched, the charges have dropped from a tiered system with 0.33% at the top end and 0.29% at the lowest, to across-the-board falls to 0.29% to another rate cut to 0.24% last August.


Robyn Laidlow, head of UK distribution says: “As our funds grow in size, and we broaden our presence in the UK, we will continue to use the resulting operating efficiencies to lower costs for investors… We’re pleased that this design [of the funds] has proved to be so popular and we’re delighted to pass the benefits of that popularity back to our investors.”

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