Evan Reedman

Vanguard has announced it will lower the cost of several of its Australian fixed interest funds, as part of an ongoing commitment to keeping costs low whilst delivering high-value products.

Fees on Vanguard’s Australian Fixed Interest Fund and Exchange Traded Fund (ETF) will be reduced from 0.24% to 0.19% and 0.20% to 0.15% respectively. Fees on the Vanguard Australian Corporate Fixed Interest Index Fund will also be reduced from 0.29% to 0.24% and the ETF from 0.26% to 0.20%.^[1]

“Keeping costs low on our broadly diversified funds is one of the many ways we continue to support Australian investors to achieve their financial goals,” said Evan Reedman, Vanguard Australia’s Head of Product.

“We are pleased to pass on cost savings to our investors as the growth and maturity of our funds continues to drive efficiencies of scale,” said Mr Reedman.

The Vanguard Australian Fixed Interest and Corporate Fixed Interest funds are designed to provide investors with access to diversified, broad market access to government and corporate-issued bonds. As a result of their growth, they hold more securities compared to their peers and can track tighter against their indices.

“Persistently low yields have led some investors to question the role of bonds in a long-term financial plan, potentially overlooking the key function of bonds in a well-diversified portfolio. As a defensive asset, bonds serve to cushion an investment portfolio and can help smooth out an otherwise anxiety-inducing ride during periods of market volatility, said Mr Reedman.

“And if there is one lesson to be learnt from the last 18 months, it is that uncertainty induced volatility is here to stay.

“For advisers, having lower cost, high quality fixed interest choices available in this environment is critical to ensure they can continue to harness the critical role of bonds and effectively diversify client portfolios.”

The fee reductions will take effect on 1 October 2021 and highlight how Vanguard’s Australian investors continue to benefit from the growth of Vanguard Australia’s funds and an ongoing commitment to give Australians the best chance of investment success.

Vanguard continues to ensure our entire fund range comprises high quality and low-cost solutions for Australian investors and over the past ten years alone Vanguard has delivered more than 40 fee cuts across our growing range of active and index investment offerings.

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[1] Please see Summary of Fee Changes table outlining upcoming fee changes.

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