The second largest asset manager in the world, Vanguard, is rolling up Germany. The Americans are coming here late, but now with all the more momentum.
The group wants to lure customers with a new ETF series. It’s called Vanguard LifeStrategy. The shares can be traded on the Frankfurt Stock Exchange. The series includes four designed ETF umbrella funds that contain both stocks and bonds.
The ETFs are based on over 20,000 investments. To this end, equities from developed and emerging countries worldwide are combined with investment-grade bonds from government issuers and companies in developed and emerging countries. So it’s an enormously large basket of investments. So I think the risk is manageable.
The LifeStrategy Ucits ETF series is aimed at private investors. I think the ETF, which is 80 percent global equities and 20 percent bonds, is suitable for conservative investors. Unfortunately, the cost is high at 0.25 percent. For comparison: I have an ETF in my portfolio that tracks the S&P 500, which only costs 0.03 percent in fees per year (TER).
ETFs are a wise tool
Many people do not want to put together their own portfolios. They gladly forgo playing Warren Buffett or Peter Lynch. That’s not even stupid. Being a stockpicker is not child’s play. Most of them fall flat on their noses. Wise is quite the slacker strategy with ETFs.
ETFs offer a standardized, inexpensive solution. You can then focus more on other things: family, hobbies, job, etc.
“Putting together and managing your own portfolio can be a complex undertaking. For this reason, we have developed the Vanguard LifeStrategy Ucits ETF series for German investors, which embodies our four investment principles,” says Sebastian Külps, Head of Vanguard in Germany Austria. “At its core, it is about long-term orientation, simplicity, transparency, and cost minimization. Therefore, this ETF series is well suited for long-term oriented investors”.
These are the four new products. Strictly speaking, there are eight ETFs, because there is a variant that distributes or accumulates:
If you only want to bet on Germany, take a look at the Vanguard Germany All Cap UCITS ETF. This contains 155 large, mid, and small-cap companies from Germany. The portfolio covers almost 95% of the German market. The total expense ratio is 0.10 percent.