Vanguard's Record Fee Cuts Tighten Screws on BlackRock, Invesco
Vanguard Group Inc. 's biggest salvo yet in its campaign to cut fees for the investing masses presents industry rivals with a painful choice. Follow suit and lose potentially hundreds of millions in revenue — or hold the line and risk losing badly needed market share.
The Valley Forge, Pennsylvania-based company unleashed its largest-ever fee reduction this week, slashing its average asset-weighted expense ratio to just 0.07% across its $10 trillion under management — a sliver of the industry average of 0.44%. The move sent shock waves across asset management, dragging down BlackRock Inc. to its worst day since 2022 on Monday while also sending the likes of Invesco Ltd. and State Street Corp. tumbling.
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However, the investment pledge is a first for the industry, and questions remain about how effectively Ofcom will be able to monitor and enforce it. What's more, could the commitment soon become a millstone around the new company's neck? At BT, the deal will mark a step change as the new company leapfrogs EE to become Britain's largest network. The former monopoly is viewed by analysts as a 'relative loser' from the deal, so is likely to step up its own network investment. Executives are also considering the launch of a new value mobile brand to beef up the company's offering at the lower end of the market. Publicly, however, BT is sanguine. Speaking to reporters last week, BT boss Allison Kirkby said: 'We're well ahead of the rest, so we don't feel the need to change our current plans.' Kester Mann, an analyst at CCS Insight, says the merger 'cements one of the most important structural changes in the history of UK mobile'. But he adds: 'The merging parties have little time to celebrate. Now, the hard work really begins as they set about implementing the many connectivity improvements they've long promised. 'For many UK mobile users that have struggled for too long with poor signal, the upgrades can't come soon enough.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
