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.
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.
An evolution towards investment strategies between active and passive management is taking place in Europe. A FTSE Russell data survey shows that Europe has had the highest adoption rates of smart beta over the last three years with 52% of European asset owners surveyed having adopted smart beta indices, compared to 28% in North America and 38% in Asia. Indeed European asset owners lead the world in adopting smart beta indices, well ahead of investors in North America and Asia.
Please the two articles from Funds Europe:
- Vanguard launches attack on active fees
- Europe leads the world in smart beta strategies