Vanguard low-cost active funds

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Vanguard is one of the world’s largest active managers. Our heritage in active fund management dates back to the year we were founded – 1975. For almost half a century we have strived to provide long-term alpha at a cost that represents value to investors.

A time-tested active edge

At Vanguard we understand the merits of both active and index investing. The breadth and depth of our experience allows us to determine when indexing is best, and when active investing can make a genuine difference. We have built an active edge on three key principles:

Talent

Whether they work internally at Vanguard or externally for one of our many partners, our status enables us to attract some of the best fund managers in the business.

Cost

Vanguard’s scale enables us to keep costs low, providing world-class active management at a cost that represents value to investors.

Patience

Our perspective is long term and our patience has been rewarded over time. 86% of our active funds globally outperformed their peer group over the last 10 years1.

1 Source: Lipper, a Thomson Reuters company. Data refers to Vanguard Active funds globally. Data as at December 31, 2020. For the ten-year period, 81 of 94 Vanguard funds outperformed their peer group averages. Results will vary for other time periods. Only funds with a minimum ten-year history were included in the comparison. The competitive performance data shown represents past performance, which is not a guarantee of future results.

High investment costs, lack of discipline and frequent personnel turnover act as headwinds to active-investing success. We work to remove these headwinds, whether through our experienced internal active managers or the external managers who earn our confidence.

Andrew Surrey, Active Distribution Lead, Vanguard UK

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Active fixed income

Managed by our extensive Fixed Income Group, our active fixed income offering is founded on a commitment to deliver value to investors by focusing on consistent, long-term alpha generation and reducing downside risk.

Whatever the market environment, Vanguard’s investment approach will remain true to label and always put our clients’ best interests first.

Discover our active fixed income funds

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Sustainable multi-asset investing

Offering an uncomplicated all-in-one, actively managed portfolio of equities and bonds from around the world, SustainableLife active funds can provide a core portfolio solution for investors who value sustainability.

SustainableLife funds are run by Wellington, our oldest and largest investment partner with whom we have entrusted investors’ capital since our inception.

Find out more about SustainableLife

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Active equity funds

We take a global, best in class approach to selecting our equity managers. Looking beyond Vanguard allows us to draw on a wealth of global resources, specialist knowledge and proprietary investment approaches to deliver balance, diversity of thought and robust risk control in our funds.

We favour experienced and diverse investment management teams and prefer to forge close and enduring partnerships. 

Our active equity funds

Vanguard Global Equity Fund

Managed by: Baillie Gifford and Wellington Management

A core global equity holding in a long-term investment portfolio combining both growth and value with an OCF of 0.48%2.

Vanguard Global Emerging Markets Fund

Managed by: Baillie Gifford, Pzena and Oaktree

A core holding for emerging market equities in a well-constructed, long-term investment portfolio with an OCF of 0.78%2.

Vanguard Global Equity Income Fund

Managed by: Wellington Management and Vanguard Quantitative Equity Group (QEG)

Two complementary managers, one traditional bottom-up and one quantitative, aim to deliver a core equity income fund with an OCF of 0.48%2.

Vanguard Active U.K. Equity Fund

Managed by: Baillie Gifford and Marathon

Two complementary active managers combined to deliver long-term capital growth in a low-cost UK equity fund with an OCF of 0.45%2.

Vanguard Global Sustainable Equity Fund

Managed by: Wellington Management

By selecting investments which meet certain sustainability criteria, the fund aims to provide an increase in value over the long term through a combination of capital growth and income, at a low OCF cost of 0.48% (versus a peer group average of group average of 1.10%3).

Source Vanguard. Data as at January 6,2021. The OCF refers to the GBP Acc and GBP Dist share classes. The Ongoing Charges Figure (OCF) covers the fund manager’s costs of managing the fund. It does not include dealing costs or additional costs such as audit fees.

3 Source: Morningstar. Peer group average OCF for the IA Global sector as at 31 October 2021. Please read the risk factors section in the prospectus.

A robust framework

The strength of our active offering is underpinned by several other factors:

Across all our funds

From the highest levels of Vanguard’s leadership, we monitor all our funds with three vital layers of scrutiny provided by our portfolio review department, global investment committee and board of directors.

£1.7 trillion in active assets makes us one of the largest active managers in the world4. This scale allows us to access securities, or investment managers that others can’t.

Fixed income

Our 90-person risk management team provides insights to drive critical portfolio construction decisions. Our trading desks in the US, UK and Australia allow regional experts to trade locally, 24 hours a day.

Our low fund costs limit the need for excessive risk taking, reducing the probability of large drawdowns and allowing us to focus on our highest-conviction strategies.

Equity & multi-asset

We conduct more than 200 meetings with prospective partners each year. This gives us confidence that the managers, or combination of managers, we select is the one that will deliver most value to investors.

The average length of our external manager relationships is 13 years; our longest relationship, with Wellington, has endured for more than four decades.

4 Source: Vanguard. Data as of 31 March, 2022

Important risk information:

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

For further information on risks please see the “Risk Factors” section of the prospectus on our website.