Vanguard Group, Malvern, has rolled out 11 new index investment funds targeting British investors who rely on independent financial advisers. The funds are based on the FTSE (Financial Times) index of British stocks, and on Asian indices.
Why now? "We had made a decision to move into the UK before a lot of the financial crisis actually hit; as it turned out, we couldn't have picked a better time," James Norris, Managing Director of Vanguard International since 2007, told me. Britons "lost a lot of confidence in active management" in last year's market collapse. So Vanguard expects investors who might have been a tough sell in the bull market will be open to its message of low-fee, broad-market funds.
Plus, "we are only going to work with fee-based financial advisors. That has been a slow but growing segment of the U.K. marketplace. There has been a significant push by regulators in the U.K. market for disclosure of fees and costs. That absolutely plays to our strengths, since we'll be in that market as the lowest-cost provider."
Vanguard's foreign portfolios total around $100 billion, of which around $60 billion (institutional and fee-only retail) is in Australia, where Vanguard executive Jeremy Duffield has built the company into one of the nation's five largest fund groups since returning home "with just a laptop" in 1996; $20 billion is in Europe (including a new Swiss business); $10 billion is in Latin America (Chilean pension funds, Mexican exchange-traded funds, and a new Colombia initiative). There's also a new office in South Korea.