Vanguard launches attack on active fees

Vanguard, the fund management house famed for low-cost index tracker funds, is now piling pressure on European active houses by launching four relatively cheap active funds.

Two funds investing in global equities will charge 60 basis points (bps) and an emerging market equities fund will cost 80 bps. The range also includes a global balanced fund charging 60 bps.

Vanguard, the second largest asset manager in the world with over $3 trillion (€2.7 trillion) in assets, has selected some well-known names to manage the funds. They are Wellington Management, Baillie Gifford, Oaktree and Pzena Investment Management.

Vanguard’s Quantitative Equity Group will also co-manage one of the funds.

Although Vanguard is known for its passive offering, it also actively manages nearly $1 trillion in assets.

The firm states that its active management philosophy contains three factors that are critical to improving the odds of outperformance: low cost, top talent and patience.

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