The four rules-based funds will be run by Vanguard’s quantitative equity group (QEG), which the firm says has been serving as an investment adviser for Vanguard portfolios since 1991 and aim to provide investors with diversified equity exposure to four distinct factors: value, momentum, liquidity and volatility.
With the launch of the four new funds, Vanguard now boasts 17 ETFs in the UK with an average expense ratio of 0.17%. With an OCF of 0.22%, all four of the new funds are UCITS ETFS.
John James, MD for Vanguard in Europe said the launch also reinforces the firm’s commitment to offering UK investors “high-value, low-cost active and index funds”.
Pointing out that the firm currently manages almost $1trn in active funds, James added: “Since entering the UK market over six years ago, we have focused on giving investors a better chance of investment success. This launch demonstrates our belief in low-cost, broadly diversified active managed strategies to help achieve that.”
According to the firm further active fund launches are planned in both the equity and fixed income space, although no further details were forthcoming.
Axel Lomholt, head of product for Vanguard’s International business, said the firm decided to launch the funds because it felt these four ETFs offer a “compelling alternative” to higher-cost active strategies that offer a similar exposure.
The firm’s Global Value Factor UCITS ETF aims to capture “the potential premiums of low-valued stocks, which are stocks that look inexpensive compared with the company’s fundamentals, the firm said, while the momentum fund will focus on stocks with strong recent share price performance, typically over the previous twelve months.
The liquidity fund will invest in stocks that are less frequently traded and could be a source of outperformance over the long-term and the fund that focuses on minimum volatility will invest in a portfolio that targets “a combination of stocks with lower volatility compared with the broader market” the firm said.
