We all love a bargain, right? A fact that hasn’t gone unnoticed at Vanguard. The US fund manager overseas $2.9trillion in assets. They pretty much invented index tracking investments in 1976 and they’ve just reduced the annual charges for some their investments.

This is great news for our clients who are invested in Vanguard funds. All the Vanguard that Proposito Financial Planning clients have invested in have reduced their on-going charges and fees. In a world where costs only seem to be going one way it’s great to see things getting a little cheaper. After all a penny saved is a penny earned.

Vanguard have a transparent attitude to charges. Firstly they are a mutual company in the US. That means they are effectively owned by their investors. This ownership model leads them keeping charges as low as possible for investors (its owners). It is their stated aim to avoid any additional charges above the annual management charge (AMC) i.e. no extra charges. Thirdly any upfront fees and taxes are paid by each investor on the way into the fund. This means they every investor pays their own way and long term investors don’t pay the fees and taxes for investors who dip in and out again quickly.

Now you’d think that was common sense. That this way of working was fair and just. That every fund manager worked this way. But you’d be wrong. Very few fund managers work this way. Perhaps they should.