Vanguard Review

In this guide, we will provide a complete review of Vanguard.

Updated: May 20, 2024
Matt Crabtree

Written By

Matt Crabtree

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In the banking and investment industry, there are so many different options to choose from. Many of them have a unique niche, or unique characteristics that make them stand out in some way.

Vanguard is a popular choice, particularly for those interested in mutual funds and ETFs, although you aren’t limited to those holdings. 

In this guide, we will provide a complete review of Vanguard, covering the type of investments they have as their own, their account options, and even reviewing the company as a whole. Take a look below to learn everything you should know about them. 

Vanguard Overview

Vanguard’s official name is Vanguard Asset Management. Most people simply refer to them as Vanguard, and that’s what you will see with their branding and marketing in most cases too. This company has facilities in several global locations, with their founding space being located in the US. 

They have a specified UK region, which is regulated by the FCA.

Vanguard was first introduced in the US in 1975, by a man named John Bogle. Since that time, the brand has grown astronomically, and on a global level. They serve more than 30 million investors across the globe. 

Those investors might simply hold Vanguard funds, or they might have investment accounts through Vanguard as their provider. Vanguard’s tag line is “A simple way to invest, at a fraction of the cost of rivals.” 

They have long been known for offering funds that are low cost. These funds are all index tracking, and they provide a lot of different offerings to choose from. If index funds are your thing, they are one of the cheapest to get in with them. 

And if you don’t know much about Vanguard, they are not owned by typical shareholders. Instead, they are owned by the millions of customers that hold Vanguard funds, which points towards working at customer satisfaction as their primary responsibility, right? 

Investing in Vanguard Funds

Vanguard offers a variety of different accounts, as well as many different funds to choose from. You do not have to open an account at Vanguard in order to purchase their funds. You can hop into their ISAs and managed accounts if you prefer. They follow a simple philosophy that encompasses these four things. 

  • Goal focus
  • Staying balanced
  • Low costs
  • Disciplined investing

If you choose to open an account at Vanguard, they have something for everyone. Let’s start with those, and then we will dive deeper into Vanguard funds in a bit. Remember that you can invest in Vanguard funds through any other trading platform that has them available to you. 

Vanguard ISA Accounts

One of the most popular types of accounts that Vanguard offers are ISA, which is an in Individual Savings Account.

In their ISA accounts, you can hold both stocks and shares. These accounts are a top choice because of their tax allowances and you can invest up to £20,000 per year in them in the UK. 

This account type allows you to manage and choose funds on your own, or to invest in their managed accounts so you have two different options within the category. In addition, you can also transfer accounts from elsewhere into your ISAs, giving you the chance to put everything in one place if you want to. 

As far as investments go, you can use their LifeStrategy funds, or choose from their 80+ individual funds to hold in the account. 

Managed ISA

Vanguard just recently added the option of a managed ISA, which allows you to simply trust Vanguard to manage your funds for you. You pay them a slightly fee, and they make sure that the account is invested in a manner that aligns with your goals. 

While they are in charge of investing and rebalancing the account, you still have authority to ask questions, and even request changes if you don’t like how things are going. This is very similar to the traditional stocks and shares ISA that we just discussed, except it's full managed on your behalf. 

Personal Pension

Are you focused on saving for retirement? A personal pension investment account is a great way to do just that. Vanguard allows you to transfer in existing pensions, or invest in specific amounts and lump sums as well. 

This pension is a simple option and it’s really low cost when you compare it to other pension plans out there. Pension accounts are also commonly called SIPP, so if you see that terminology, this is what it’s referring to. 

The value of a pension plan are tax relief benefits, tax efficient growth, and the ability to leave an inheritance tax free too. 

Junior ISA

It’s never too early to start investing for your children, and even educating them on the investment industry.

A junior ISA is designed for that purpose. At Vanguard, you can contribute up to £100 each month into a junior ISA. 

You can have one of these account for every dependent of yours. These are designed for parents and legal guardian to open for their minor children. However, it’s also possible for family members and friends to make gifts on your child’s behalf. 

General Accounts

In terms of popularity, general accounts fall right beneath the ISA. While ISAs are certainly nice, general accounts are for you to do what you wish in without the limitations and rules of ISAs and pension plans. 

However, it’s not uncommon to invest in an ISA first and then turn to your general account for anything over that allowance. Your investment approach is totally up to you. The general account doesn’t have any annual limits, but you may have tax liabilities from this account. 

In a general account, you are in control. There are no managed options on this category. As you invest, you can choose any funds available to you from Vanguard, or you can pick one of their LifeStrategy funds. Their funds to choose from includes active funds, index funds, and ETFs. 

Personal Financial Planning

Finally, Vanguard also offers personal financial planning, which provides you with an adviser that looks at your entire situation. They give you personal financial advice through a low-cost plan. The focus of these is really planning and saving for retirement, but they look at your entire financial situation to do so. 

Vanguard Fund Review

Vanguard has more than 80 different funds in their creation, and they consist of multiple categories.

They have funds created for every objective and risk profile. This includes target dates, income, growth, etc. 

These are the fund categories they have. 

  • Index and active funds
  • ETFs
  • LifeStrategy funds
  • Target Retirement funds
  • ESG funds

You can look at every individual fund in great detail to make determinations, and their website is user-friendly in terms of navigating the choices and being able to clearly see what a fund is right away. 

For example, their emerging markets bond fund is made up of 88% bonds. At a glance, we can see that this fund has an ongoing charge of .6%, active management, risk 4 out of 7, and holds 311 assets within it. 

This type of information is provided at a glance for every single fund. From there, you can drill down deeper to see the full fund details and find out more about any of them that you are interested in. Their funds are monitored and managed, or track an index. 

While Vanguard has more than 80 total funds at your fingertips to date, they continue to create new funds that you can look at. One of their latest funds is an ESG fund. They have a new ESG that is an Asia Pacific All Cap UCITS ETF. This particular fund is a risk level 6 out of 7 with 1,826 holdings. It has an ongoing charge of only .17%. 

The ESG fund sector is one of their newest additions, and this is where the majority of their new funds are right now. 

If you own an account at Vanguard, you are tied to only purchasing from these Vanguard funds. They have a wide selection to choose from. Remember that you can hold most Vanguard funds using other platforms as well. 

Vanguard Fund Management

Every fund within Vanguard is made up of a variety of stocks and shares on the market. These funds consist of publicly traded assets, many of which are global. That being said, some of them may be more localized in holdings as well. 

As is with most fund companies, there are active managers that are constantly watching the market and making decisions when a fund needs to be adjusted or rebalanced. They provide necessary communication to shareholders as the need arises. 

Most of the time when they plan to make a substantial change, anyone who holds that Vanguard fund will be notified of the changes. They often even provide advanced notice that changes are coming. This is another detail you can see on their website when you look at all of their funds. 

Every fund is managed based on the goal of that fund, as well as the risk profile of that fund. They won’t randomly change a fund with a 2 of 7 risk profile to be a 6 of 7 risk profile. The funds remain steadfast in terms of what they are, and the type of outlook at they provide. What might change are the holdings within the fund, or even the allocations of those holdings. 

Vanguard Fees Overview

Vanguard is owned by all of the millions of different shareholders, which are their customers. Rather than being owned by traditional stakeholders, this is something that makes them unique. They have a reputation for being one of the cheapest and most affordable platforms to invest in. Their funds are typically inexpensive as well, even if you don’t hold them in a Vanguard account. 

If you choose to use Vanguard’s platform for your investment needs, they charge a straight rate of .15% of your holdings. This annual fee is applicable to any account under £250,000. If you have more than that in your account, there are no platform fees, just your fund fees for the holdings. 

This is pretty inexpensive overall. Their fund fees are also pretty low for the most part. None of them are over 1%. The majority of funds range anywhere from .06% to .78%. If you compare to other similar funds in the industry, you will find they provide steep competition as far as costs. 

Something else you should know is that Vanguard chose to actually reduce many of their fund fees back into 2019, and they have not raised them back up. They lowered the ongoing charges of almost 40 funds, which is half of their assets. 

If low fees and simple investing is what you are after, Vanguard really has this concept down to a science.

They don’t charge any funds for transfer accounts, or for selling funds. Only a few of their funds charge fees for purchasing the fund, and those are low as well. 

Vanguard Tools & Research Capabilities

 While Vanguard’s internal offerings are their own funds, they don’t leave you without education and knowledge available to make choices. In Vanguard accounts, you can’t purchase outside stocks and shares, but you still should know what’s going on in the market. 

After all, many of Vanguards assets are mutual funds, index funds, and ETFs. What is in these? Funds, stocks, and shares compose these assets, which means you are in the market outside of Vanguard, it’s just through the utilization of their assets. 

Being in the know, having tools available, and having research and education is vital for any trading platform

Their provisional education includes research and tools to help you choose the funds that meet your needs the best. Remember that you can let them manage your account, you can also purchase target date funds or their LifeStrategy funds instead of picking individual funds. 

In addition to this, they have a tool on their site designed to help you choose accounts that fit your needs the best. You can learn about investing in general, how to use your pension money, and even access a pension calculator. 

Those are just the tools. 

Easy access to the public and account holders are their education and research materials that include everything from investing guides to market views to news as well. It’s a comprehensive resource with many different facets of research and education within it. 

Vanguard’s platform doesn’t have a lot of charting tools, which may be a downside to some investors. However, since you can’t purchase options, make day trades, or delve into the deeper markets, it’s simply not as necessary. Their tools are sufficient for the investment provisions of their platform. 

Ethical Investing with Vanguard

Something that has become more and more popular with investors is the ability to invest ethically. Not every investor is concerned with this, but there are many out there who focus on this capability. 

If you’re looking for a broad spectrum, you won’t find it here. But Vanguard doesn’t leave you without any ethical investing choices. Of course, considering Vanguard has only about 80 total funds, they really have a good selection of ethical funds to choose from. 

Vanguard currently offers three different sustainable life funds.

These funds are easy to find, and simple to understand. They are called Vanguard Sustainable Life funds. All of these are equity funds and the three choices allow you to determine whether you want 40-50%, 60-70%, or 80-90% equity. 

The sustainable life funds are all actively managed and take into consideration things like social and governance, environmental needs, sustainability, and other similar factors. Keep in mind that as they continue to grow their ESG funds, you might find even more choices there that meet this particular investment need. 

One other category to consider in terms of ethical investing might be the Vanguard Global Sustainable Equity funds. There are four of these to choose from, adding even more choices to ethical investing selections. 

Is Vanguard Safe for Investing?

While some would argue that having a Vanguard account with no outside exposure isn’t a good idea, we’re not sure we completely agree. You see, being in Vanguard simplifies the holding and selection process, and you can still be diversified in doing so. 

Diversification comes from being invested into multiple assets, while also allocating portions of your portfolio to specific things. Those particular allocations will depend on your goals, your risk tolerance, and your overall strategy. In this case, that would mean utilizing a variety of Vanguard funds that fit into these allocations. 

Let’s talk about safety just a moment. Your money is never 100% guaranteed when you are invested in the stock market. This will be true of any investment app out there. There are no guarantees. Stocks can go up and down, and you can certainly experience both gains and losses. 

However, as a financial corporation, you are protected to some extent thanks to the regulatory authority of FCA. Vanguard in the UK is covered by FSCS up to their stated limits should the company go under. 

At this time, Vanguard is financially sound and you can monitor and track that information since there are owned by their customers. 

Opening or Transferring to Vanguard Accounts

If you decide that a Vanguard account might be the right fit for you, it’s a simple process to open an account. You can do it all online, and you can easily transfer accounts in as well. They provide a transfer service for any type of ISAs and retirement accounts.

This service is free to use. You just have to fill out the appropriate forms and follow the process. 

If you are opening a new account, you will choose the type of account, and then go through the process. This is overall simple, you just need to be able to fill in your personal information, create a login and password, and answer questions to set up your risk profile and goals. 

The process is smooth, which is definitely a bonus for using Vanguard. 

Vanguard Customer Service

Vanguard has so-so customer service offerings. When you get someone on the line, they are always friendly and helpful. The challenge is that you may spend some time on hold if they have a high call volume. 

They do have a lot of FAQs on their website, which may be helpful for basic issues. You can start by sorting through there before you seek help from a person. They are only open during business hours for phone calls and email contact. 

You can email them; you can also use their chatbot and see if that is helpful. While customer service is friendly and responsive, you may be playing the waiting game and that’s a bit of a downside. 

Vanguard Pros and Cons

Every company out there has great features that make them desirable, but they also have features that are not as great.

You will likely never find a company that is 100% perfect with absolutely no cons. 

That being said, Vanguard is an overall great choice, but they do have pros and cons just like any other option out there. 

Check out these pros and cons. 

Pros

✔️ Vanguard is owned by customers

✔️ Simple platform to use

✔️ Some of the lowest fund fees around

✔️ Lowered almost half of their fund fees in 2019

✔️ Several account options to choose from

✔️ 80+ assets offer variety 

✔️ Sufficient tools and education available

✔️ More than 40 years of history

✔️ You can purchase Vanguard funds on any platform that has them available

Cons

❌️ In a Vanguard account, you can only hold Vanguard assets

❌️ Customer service responses are sometimes slow

❌️ Limited charting tools

Final Thoughts

Overall, Vanguard is a solid investment choice. Whether you choose to use them directly for your accounts and holding their funds, or you choose to purchase Vanguard funds through other platforms.

The low fees and simplicity make a great setup for investing from beginners to experienced users. You will find variety and choices that fit into any type of investment preference for the most part.

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