One Year In, How Do Vanguard's ETFs Measure Up?

For UK and US equity exposure, Vanguard's ETFs have the edge in terms of tracking difference, while iShares' ETFs offer the tightest trading spreads

Alastair Kellett 18 June, 2013 | 6:15PM

We’ve now passed the 1-year mark since Vanguard, a fund behemoth in the US, launched its European ETF business with products linked to the FTSE 100, the FTSE All-World, the FTSE Emerging Markets, the S&P 500 and a Barclays global government bond index

The Vanguard FTSE 100 ETF (VUKE) and Vanguard S&P 500 ETF (VUSD) are by some margin the biggest of that group, with assets of roughly £230 million and £400 million, respectively, at the time of writing. They are also competing with a host of other European-domiciled ETFs that track the same indices. So one year in, how do Vanguard's contributions to the European landscape measure up against their more established peers? 

The most noticeable points of comparison are the funds' total expense ratios (TERs). Vanguard is structured as a mutual company wherein the management firm is owned by the investors in its funds. That has traditionally allowed it to offer funds with extremely low fees, since any fee income is designed to profit the unitholders anyway, not a separate constituency that might argue for higher margins from the customer. To wit, Vanguard FTSE 100's TER of 0.10% is the lowest among the group of European-domiciled ETFs tracking that index, where the rest range from 0.25% to 0.40% (see figure 1). Its S&P 500 ETF has a TER of 9 basis points. That’s the same as HSBC S&P 500, although it isn’t the lowest in the group, a distinction that belongs to UBS ETFs plc S&P 500, which sports a TER of 0.05% (see figure 2). 

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
ComStage FTSE 100 ETF  
HSBC S&P 500 ETF32.10 USD-1.79
iShares Core FTSE 100 ETF GBP Dist601.82 GBX-0.84
iShares FTSE 100 ETF GBP Acc102.72 GBP1.26
iShares S&P 500 ETF USD Dist31.56 USD-1.88
Vanguard FTSE 100 UCITS ETF27.06 GBP-0.70
Vanguard FTSE All-World UCITS ETF89.00 USD-1.77
Vanguard FTSE Emerg Markets UCITS ETF57.92 USD-2.68
Vanguard S&P 500 UCITS ETF60.13 USD-1.90
Vanguard UK Gilt UCITS ETF26.45 GBP0.40

About Author

Alastair Kellett

Alastair Kellett  is an ETF analyst with Morningstar Europe.

Audience Confirmation


By clicking 'accept' I acknowledge that this website uses cookies and other technologies to tailor my experience and understand how I and other visitors use our site. See 'Cookie Consent' for more detail.

  • Other Morningstar Websites
© Copyright 2020 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies