Popular Vanguard global tracker fund cuts fee by 25%

Investors in Vanguard FTSE All-World UCITS ETF will see their yearly fund fee fall from 0.19% to 0.14%, a cut of more than 25% that Vanguard estimates will save investors approximately $37 million (£27.7 million) annually.

The global tracker fund, which holds nearly $75 billion (£56.2 billion) in assets, saw its accumulation share class (VWRP) take top spot in as our most-popular ETF in June. Its income share class (VWRD) took seventh place. In our ii Top 50 Index, which ranks the most-bought funds, investment trusts and ETFs each quarter, VWRP was second in the rankings, while VWRD took 18th place.

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Both VWRP and VWRD are “all world” funds, which means they own emerging market shares as well as shares listed in developed markets. Its weightings to Pacific and Emerging Markets stand at 11.2% and 9.9%.

Global tracker funds that follow the movements of the MSCI World Index only have exposure to developed markets. 

With the income share class, income generated by a fund’s underlying investments is paid out to investors. With accumulation shares, the income is reinvested back into the fund, which bolsters the effect of compounding, in which investment returns themselves generate future gains.

Jon Cleborne, Head of Europe at Vanguard, said “this fee reduction reflects Vanguard's longstanding commitment to using the benefits of our scale to lower costs and improve outcomes for investors." 

Vanguard has over the years made many other moves in cutting fees to pass on economies of scale, including earlier this year for its LifeStrategy fund range.

However, there is a slightly cheaper option for investors looking for global exposure that includes emerging markets. HSBC FTSE All World Index costs 0.13% a year. 

For those only seeking developed market exposure, an especially cheap option is the UBS Core MSCI World ETF (WRDA), which charges 0.06%. It tracks the MSCI World index.

Other options tracking the MSCI World index are Fidelity Index World, which costs 0.12% a year. More expensive, at 0.2% a year, is iShares Core MSCI World ETF (SWDA).

• ii Top 50 Fund Index: most-bought funds, trusts and ETFs in Q2 2026
• Why this investment type shouldn’t be ignored

The state of play for fund fees

Whether you prefer to buy funds, investment trusts, ETFs or individual shares, a desired level of investment return over a specific time period cannot be guaranteed in advance.

However, one thing that investors can control is costs. The yearly fees charged by funds can be easily overlooked given they are quoted as a percentage. 

When it comes to fund charges, here's the state of play: actively managed funds and investment trusts tend to have annual ongoing charge figures in the range of 0.7% to 1%, while passive funds – index funds or exchange-traded funds (ETF) – typically cost less than 0.25%. If the passive fund is tracking the US or UK market, fees tend to be less than 0.1%. 

There's nothing wrong with paying a premium providing the outcome is satisfactory –  for example if the actively managed fund outperforms the wider market over the long term.

However, if the actively managed fund underperforms the wider market then you will still pay the same fee and you could have got more bang for your buck by simply owning the market through a passive fund for a lower fee.