Vanguard's Approach to Active Investing

By Lora Benson | Jan 14, 2016
At Vanguard, we like to do things differently. Rather than focusing on returns we believe that what is really important to investors is achieving their life goals.

At Vanguard, we like to do things differently. Rather than focusing on returns we believe that what is really important to investors is achieving their life goals.

The way to do this, in our view, is to hold to four basic investment principles: Set clear goals; develop a well-balanced, diversified portfolio; minimise costs; maintain a disciplined, long-term perspective.

As a fund provider, our role at Vanguard is to offer a broad range of choices, including both active and passive funds, single-strategy funds and multi-asset solutions, such as our popular LifeStrategy Funds. Across all of these options, we emphasise low costs. The phrase ‘the Vanguard effect’ has even come to be used to describe the fall in fees that often follows Vanguard entering a particular market.

One of the best ways to build a low-cost portfolio is by using index funds. We think this is a good starting point for most investors. But while we’re known for our index funds, approximately a third of our global assets are in active strategies. We have now launched four actively managed funds in the UK market, each with an ongoing charges figure (OCF) of 22 basis points. 

  • The Vanguard Global Value Factor UCITS ETF invests in low-valued stocks, which are stocks that look inexpensive compared with the company’s fundamentals.
  • The Vanguard Global Momentum Factor UCITS ETF focuses on stocks with strong recent share price performance, typically over the previous twelve months.
  • The Vanguard Global Liquidity Factor UCITS ETF invests in stocks that are less frequently traded and could be a source of outperformance over the long-term.
  • The Vanguard Global Minimum Volatility UCITS ETF targets a combination of stocks with lower volatility compared with the broader market allows investors.

Our approach to active investing is underpinned by the same investment principles we employ across all our investment strategies. We believe these principles give investors the best chance of success.




Important information
This document is directed at professional investors only 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 material 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 on this document does not constitute legal, tax, or investment advice. You must not, therefore, rely on the content of this document when making any investment decisions.

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