Vanguard slashes management fees

Manager cuts fees

Vanguard has cut the fees of seven of its wholesale index funds by as much as 50%.

This is in keeping with the fund manager's philosophy to pass on to customers any savings that come with economies of scale.

Vanguard's fees are about a fifth of the average Australian managed fund fee, with the International Shares Index Fund charging 0.18% per annum and the Australian Shares Index Fund 0.24 percent.

Robin Bowerman, Vanguard's head of corporate affairs, says: "It is 15 years since Vanguard began offering low-cost index funds to Australian investors. Over that time, for every $100,000 invested in Vanguard's Australian Shares Index Fund, an investor would have made a saving due to a lower headline fee of over $25,000 versus a fund with an industry average fee."

Here's one for the bears

If you believe the Australian sharemarket is going down, there is now a managed fund allowing you to profit from, or hedge against, a falling Australian equities market.

The BetaShares Australian Equities Bear Hedge Fund will trade under the ASX Code BEAR on the sharemarket.

It generates returns that are negatively correlated to the S&P/ASX 200 by using futures contracts, the ASX SPI 200 futures.

Unlike CFDs, the BetaShares Australian Equities Bear Hedge Fund does not employ leverage or expose investors to the risk of margin calls.

"We have seen the Australian equities market swing markedly and stay range bound in the last 18 months," says Drew Corbett, head of investment strategy at BetaShares.

"With the BEAR Fund, investors now have a tool that provides the potential to profit from, or hedge against, market downturns."

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