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At Vanguard we have always recognised that while index funds offer a good starting point for all investors, active strategies can play an effective role in the portfolios of investors who are comfortable with taking on extra risk in pursuit of market-beating returns.

As with any investment, success with active funds is not guaranteed and that’s why choosing the right manager is so important, because failure to achieve net outperformance in the long term is a very real and significant risk with active strategies.

Our approach to active management has been honed over decades and rests on three core principles, which we believe give us a competitive edge over the market. Those principles are: we work only with world class talent; we are patient to allow alpha to materialise over time; and we keep costs low so that investors to keep more of their return.

Whether from within our ranks or from other leading fund managers, we bring together some of the brightest minds from around the active-investing world to manage our clients’ investments. We focus on strict qualitative criteria, not short-term performance, and we’re confident our approach to active is right for most investors seeking alpha.

For that reason, we are delighted to reveal that all four of our active funds which marked their fifth anniversary on 26 May have outperformed their respective peer group averages*. Those funds the Vanguard Global Balanced Fund, Vanguard Global Equity Fund, Vanguard Global Equity Income Fund and Vanguard Global Emerging Markets Fund.

FundReturn (Annualised)Return (Cumulative)Peer group quartile
Vanguard Global Equity A GBP Acc17.29121.931
Peer Group Average (IA Sector = Global)14.5099.78
Vanguard Global Equity Income A GBP Acc10.7966.892
Peer Group Average (IA Sector = Global Equity Income)10.5865.88
Vanguard Global Emerging Markets A Acc17.12120.321
Peer Group Average (IA Sector = Global Emerging Markets)13.8693.01
Vanguard Global Balanced A GBP Acc10.0561.381
Peer Group Average (IA Sector = Mixed Investment 40-85% Shares)8.2649.22

Source: Vanguard, based on data from Morningstar and the Investment Association. Data correct between 26 May 2016 and 25 May 2021. All returns are calculated nav to nav in GBP, net of fees.

Past performance is not a reliable indicator of future results

Sticking to disciplined processes and investments goals viewed through a long-term lens, the managers have achieved annualised double-digit total returns for all four of the five-year anniversary funds. Those returns stretch from 10.05% for the multi-asset Vanguard Global Balanced fund, to 17.29% for the Vanguard Global Equity Fund.

Active managers sometimes face bumps along the road to long-term net outperformance, so we thank our investors for sticking with us, valuing the rich diversity of thought that comes from working with some of the brightest minds in the active-investing world, both internal and external to Vanguard, and here’s to many more years of investing success.

*There are three further funds in Vanguard’s active funds range; Vanguard Global Credit Bond Fund, Vanguard Emerging Markets Bond Fund and Vanguard Active U.K. Equity Fund.

In case you missed it or want to go back and listen to some sessions again, here’s the link to last week’s Active Investor Conference event Connect with the experts.

For more on the four funds celebrating five year anniversaries:

Global Balanced Fund - GBP Acc | Vanguard UK Professional

Global Equity Fund - GBP Acc | Vanguard UK Professional

Global Equity Income Fund - GBP Acc | Vanguard UK Professional

Global Emerging Markets Fund - GBP Acc | Vanguard UK Professional

For more details on the other funds in Vanguard’s active range:

Global Credit Bond Fund - Investor GBP Hedged Acc | Vanguard UK Professional

Emerging Markets Bond Fund - Investor GBP Hedged Acc | Vanguard UK Professional

Active U.K. Equity Fund - GBP Acc | Vanguard UK Professional

 

Annual performance

Five year annual performance to 25 May 2021:

5/26/2016
-
5/25/2017

5/26/2017
-
5/25/2018

5/26/2018
-
5/25/2019

5/26/2019
-
5/25/2020

5/26/2020
-
5/25/2021

Return (%)

Return (%)

Return (%)

Return (%)

Return (%)

Vanguard Global Equity A GBP Acc

39.18

10.11

-0.31

10.39

31.59

FTSE All World Index

34.90

9.71

4.68

4.68

25.71

Peer Group:  IA Sector = Global

Peer Group Average

32.06

10.02

3.70

3.66

28.57

Vanguard Global Equity Income A GBP Acc

33.58

7.00

-0.50

-6.32

25.28

FTSE Developed Index

33.99

9.75

5.62

5.48

25.44

Peer Group:  IA Sector = Global Equity Income

Peer Group Average

27.06

4.21

5.58

-4.20

25.83

Vanguard Global Emerging Markets A Acc

51.86

9.76

-0.20

-7.86

43.75

FTSE Emerging Index

45.04

9.65

-3.32

-1.75

28.28

Peer Group:  IA Sector = Global Emerging Markets

Peer Group Average

44.44

9.74

-5.86

-3.52

34.54

Vanguard Global Balanced A GBP Acc

22.27

3.90

6.03

1.71

17.79

Vanguard Global Balanced Composite Index

22.63

6.03

5.16

5.17

17.70

Peer Group:  IA Sector = Mixed Investment 40-85% Shares

Peer Group Average

20.07

5.35

0.01

-1.39

19.07

Source: Morningstar. Data correct between 26 May 2016 and 25 May 2021. All returns are calculated NAV to NAV with gross income reinvested, in GBP, net of fees.

Performance figures include the reinvestment of all dividends and any capital gains distributions. The performance data does not take account of the commissions and costs incurred in the issue and redemption of shares.

Past performance is not a reliable indicator of future results.

Investment risk information

The value of investments, and the income from them, may fall or rise and investors may get back less than they invested.

Past performance is not a reliable indicator of future results.

Performance may be calculated in a currency that differs from the base currency of the fund. As a result, returns may decrease or increase due to currency fluctuations.

Some funds invest in emerging markets which can be more volatile than more established markets. As a result the value of your investment may rise or fall.

Investments in smaller companies may be more volatile than investments in well-established blue chip companies.

Funds investing in fixed interest securities carry the risk of default on repayment and erosion of the capital value of your investment and the level of income may fluctuate. Movements in interest rates are likely to affect the capital value of fixed interest securities. Corporate bonds may provide higher yields but as such may carry greater credit risk increasing the risk of default on repayment and erosion of the capital value of your investment. The level of income may fluctuate and movements in interest rates are likely to affect the capital value of bonds.

The Vanguard Emerging Markets Bond Fund and Vanguard Global Credit Bond Fund may use derivatives, including for investment purposes, in order to reduce risk or cost and/or generate extra income or growth. For all other funds they will be used to reduce risk or cost and/or generate extra income or growth. The use of derivatives could increase or reduce exposure to underlying assets and result in greater fluctuations of the Funds net asset value. A derivative is a financial contract whose value is based on the value of a financial asset (such as a share, bond, or currency) or a market index.

Some funds invest in securities which are denominated in different currencies. Movements in currency exchange rates can affect the return of investments.

For Vanguard Global Equity Income Fund - Charges are deducted from capital (not income). Whilst this may increase the level of income paid, it will result in capital erosion and will constrain growth

For further information on risks please see the “Risk Factors” section of the prospectus on our website at https://global.vanguard.com.

Important information

This document is directed at professional investors and should not be distributed to, or relied upon by retail investors.

This document is designed for use by, and is directed only at persons resident in the UK.

The information contained in this document is not to be regarded as an offer to buy or sell or the solicitation of any offer to buy or sell securities in any jurisdiction where such an offer or solicitation is against the law, or to anyone to whom it is unlawful to make such an offer or solicitation, or if the person making the offer or solicitation is not qualified to do so. The information in this document is general in nature and does not constitute legal, tax, or investment advice. Potential investors are urged to consult their professional advisers on the implications of making an investment in, holding or disposing of shares and /or units of, and the receipt of distribution from any investment.

Vanguard Investment Series plc has been authorised by the Central Bank of Ireland as a UCITS and has been registered for public distribution in certain EEA countries and the UK. Prospective investors are referred to the Funds' prospectus for further information. Prospective investors are also urged to consult their own professional advisers on the implications of making an investment in, and holding or disposing shares of the Funds and the receipt of distributions with respect to such shares under the law of the countries in which they are liable to taxation.

The Manager of Vanguard Investment Series plc is Vanguard Group (Ireland) Limited. Vanguard Asset Management, Limited is a distributor of Vanguard Investment Series plc.

The Authorised Corporate Director for Vanguard Investments Funds ICVC is Vanguard Investments UK, Limited.  Vanguard Asset Management, Limited is a distributor of Vanguard Investments Funds ICVC.

For further information on the fund's investment policy, please refer to the Key Investor Information Document (“KIID”). The KIID  for this fund is available, alongside the Prospectus via Vanguard website https://global.vanguard.com/.

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