Vanguard’s S&P 500 UCITS ETF surpasses £20bn in assets

Aug 21st, 2018 | By | Category: Equities

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The Vanguard S&P 500 UCITS ETF has surpassed £20 billion in assets under management, becoming Europe’s second domestically domiciled and listed ETF to reach the milestone.

Andreas Zingg, Head of ETF Distribution for Europe at Vanguard

Andreas Zingg, Head of ETF Distribution for Europe at Vanguard.

The first ETF to reach the mark was the iShares Core S&P 500 UCITS ETF (CSP1 LN), which crossed the threshold in May 2018.

The performance of the US equity market has been a contributing factor to the Vanguard fund’s achievement (the bellwether index up around 14.0% year-to-date), as has a depreciating pound; however, several bumper months of investor inflows helped to power it through the landmark on 16 August 2018.

These include nearly £800 million in net inflows in February, more than £500m in April and £200m in July, plus in excess of £500m in the month-to-date (16 August), putting the fund potentially on course to record its strongest month of inflows year-to-date.

Andreas Zingg, Head of ETF Distribution for Europe at Vanguard, commented, “We are flattered that investors have entrusted us to look after their money. Since the beginning, we’ve always viewed growth as an outcome, rather than a goal, and this is reflected in our product philosophy; offering low-cost, high-quality products that are sound, enduring, and meet our clients’ needs.”

“Our ambition is always to provide products that allow investors to deliver over the long-term, through balanced, diversified portfolios.”
– Andreas Zingg, Head of ETF Distribution for Europe at Vanguard

While Zingg acknowledged that recent flows have, in part, been spurred by strong economic performance in the US, they also reflect the merits of the product – physically backed and with a total expense ratio (TER) of just 0.07% – itself. He said, “Our ambition is always to provide products that allow investors to deliver over the long-term, through balanced, diversified portfolios.”

The ETF has several listings across Europe including on the London Stock Exchange in US dollars (VUSD LN) and pound sterling (VUSA LN); on Deutsche Boerse (VUSA GY) and Euronext Amsterdam (VUSA NA) in euros; and on the SIX Swiss Exchange (VUSA SW) in Swiss francs.

But while the ETF has notched up a sizeable achievement, it still seems small compared to its US cousin, the Vanguard S&P 500 ETF (VOO US), listed on NYSE Arca, which houses nearly $100bn (£78.3bn) in assets. What is more, VOO is overshadowed by two even-larger S&P 500 ETFs from State Street Global Advisors and BlackRock which have $270bn (£211bn) and $157bn (£123bn) AUM respectively.

All this just suggests that it and others in Europe have the potential to go much further in terms of assets under management – a notion that Vanguard shares.

“We’re confident that the growth of ETFs in Europe will continue, and perhaps even accelerate,” said Zingg. “Ultimately, ETF’s have become popular because they are a great investment innovation; they are transparent, low-cost, liquid, easily accessible and portable across multiple stock exchanges. ETF’s are also poised to capitalise on the secular trends changing the industry; a regulatory environment increasingly focused on costs and transparency, the rise of robo-advice, and the struggles of traditional active management to deliver value for investors.”

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