RaboPlus is offering indexing on its online managed funds platform for the first time with the addition of eight Vanguard funds to the existing 75 incumbent products.
“We’ve typically only offered active funds and that’s not been intentional by any means. It’s just been the case of how we’ve slowly built out the investment offering, so we’ve had a lot of customer requests for index funds over the course of the last 18 months to two years,” RaboPlus investment manager Tim Hewson said.
The eight new Vanguard funds now available to RaboPlus customers are: the manager’s Australian Shares Index Fund, Australian Shares High Yield Fund, hedged and unhedged versions of the manager’s International Shares Index Fund, Australian Fixed Interest Index Fund and its hedged international equivalent, and the Australian Property Securities Index Fund and its hedged international equivalent.
By adding the new funds RaboPlus has also made investing through its platform more cost effective, which Hewson said is a factor that is very important to its investors.
“Cost is certainly important. By way of the feedback from the surveys we’ve conducted cost is certainly the top two or three considerations,” he said.
On top of the more cost-effective characteristics of the index funds, RaboPlus is offering lower brokerage fees for these products.
“We normally charge 0.75 per cent brokerage upon transaction with no ongoing, exit or administration fee. For the index funds we are charging lower ongoing brokerage of 50 basis points and that’s just about creating value,” Hewson said.
“They [index funds] are a lower cost structure and we want to deliver true value to customers,” he said.
Furthermore, until 31 July 2009 RaboPlus is reducing that fee to 0.25 per cent.
“Whenever we’ve put new funds or new fund managers on the platform in the past we’ve always run what we’ve considered to be a promotion for a reasonably short period of time,” Hewson said.
