Vanguard will lower the cost of four of its Australian fixed interest funds in a move the investment manager attributes to growth and maturity of its funds.
Fees on Vanguard’s Australian Fixed Interest Fund and Exchange Traded Fund (ETF) will be reduced from 0.24% to 0.19% and 0.20% to 0.15% respectively. Fees on the Vanguard Australian Corporate Fixed Interest Index Fund will also be reduced from 0.29% to 0.24% and the ETF from 0.26% to 0.20%.
Vanguard Australia’s Head of Product Evan Reedman said keeping costs low was one way to support investors.
“We are pleased to pass on cost savings to our investors as the growth and maturity of our funds continues to drive efficiencies of scale,” Mr Reedman said.
A statement by Vanguard said as a result of their growth, they hold more securities compared to their peers and could track tighter against their indices.
“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,” said Mr Reedman.
“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.”
The fee reductions took effect on 1 October 2021.
Summary of Fee Changes
|Fund/ETF||Current %||New %||Effective from|
|Vanguard Australian Fixed Interest Index ETF (VAF)||0.20%||0.15%||1 October 2021|
|Vanguard Australian Fixed Interest Index Fund||0.24%||0.19%|
|Vanguard Australian Corporate Fixed Interest Index ETF (VACF)||0.26%||0.20%|
|Vanguard Australian Corporate Fixed Interest Index Fund||0.29%||0.24%|