Vanguard to launch Irish-domiciled ETFs

Vanguard Funds, the US funds house, is to launch a suite of Irish-domiciled exchange-traded funds (ETFs) to offer low cost access to diversified stock and bond investments.

Vanguard has received approval from the Central Bank of Ireland, and the initial five ETFs are expected to be admitted to trading on the London Stock Exchange shortly.

Tom Rampulla, managing director of Vanguard Asset Management, said: “At Vanguard, we see ETFs and traditional mutual funds as two sides of the same coin. The Vanguard Group runs both its traditional funds and its ETFs using the same philosophy, process and people.

“Both products offer investors a low-cost way to access broadly diversified stock and bond investments. Simply put, we want to offer clients the best investment product in the way they want it delivered.

“We have chosen to launch the physical-backed ETF replication model because it is straightforward and easy to understand. We have created a suite of educational materials to help advisers, institutions, and investors understand ETFs and become comfortable with how ETFs work.

“We believe that through our experience and indexing expertise, Vanguard offers a unique combination of low-cost, tight-tracking ETFs from a provider that investors can trust.”

The ETFs will have total expense ratios (TERs) between 0.09% and 0.45%, compared to an industry average TER in the UK of 0.53%. The first five funds will be a FTSE 100 ETF, an S&P 500 ETF, FTSE Emerging Markets ETF, a FTSE All-World ETF, and UK Government Bond ETF. Knight Capital Europe will be a registered market maker for the new ETFs.

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