According to a statement, Vanguard said its two new active ETFs, Global Value Equity and Global Minimum Volatility offers “practical and low-cost investment options for investors seeking to gain factor exposure”.
The active ETFs aim to provide “specific risk and return objectives through factor exposures to global value and global minimum volatility” with a management fee of 0.28 per cent, the statement said.
Vanguard’s Quantitative Equity Group will manage the two funds and utilise rules-based active management to provide exposure to factors in a “diversified, low cost and transparent way”.
The Australian head of Quantitative Equity Group Michael Roach said the nature of the actively managed ETF set Vanguard apart from other factor fund offerings.
“Factors are the DNA of an investment portfolio; the underlying characteristics that drive investment performance,” Mr Roach said.
“We are actively managing these portfolios, weighting shares according to their exposure to each factor whilst maintaining a broadly diversified investment portfolio.
“A major benefit of using active versus index management for factor implementation in these portfolios is that we reduce factor drift in the portfolio – rebalancing as needed rather than being tied to the index rebalancing date.”
Vanguard head of investments for Asia Pacific Daniel Reyes added that offering active management at low cost removed “one of the most persistent barriers to active outperformance”.
“This expansion of our ETF range offers more tools to help investors build well diversified portfolios – across and within asset classes and investment styles, and according to their appetite for risk,” Mr Reyes said.
Vanguard Australia now has more than $140 billion funds under management.
