Vanguard to launch two gilt trackers

Vanguard is to launch two gilt funds later this week both of which carry an annual management charge and total expense ratio of 15 basis points.

The Vanguard UK Inflation-Linked Gilt Index and UK Long Duration Gilt Index funds will launch on February 3 and will expand the group’s range of UK index funds to 14.

In addition to the 0.15% TER, the UK Inflation-Linked Gilt Index fund will carry an initial ‘preset dilution levy’ of 15 bps, rising to 40 bps for the UK Long Duration Gilt Index fund. According to the group this levy allows it to allocate the costs equitably, so new investors bear the costs of their own transactions. (article continues below)

The UK Inflation-Linked Gilt Index fund will seek to track the performance of the Barclays Capital UK Government Inflation-Linked Float Adjusted Bond index.

The Vanguard UK Long Duration Gilt Index fund meanwhile will seek to track the performance of the Barclays Capital UK Government 15+ Years Float Adjusted Bond index.