Against the tide of political pressure to “Buy British,” Vanguard is going global.
Vanguard has announced a significant restructuring of its flagship LifeStrategy range (managing ~£52bn / $70bn), explicitly reducing its exposure to UK assets to offer investors a more globally diversified portfolio.
📉 THE ALLOCATION CHANGES: To be phased in from late March to June 2026:
- UK Equity: Reduced from 25% → 20%.
- UK Fixed Income: Reduced from 35% → 20%.
- The Rationale: Vanguard stated that “LifeStrategy has evolved to have a more global focus” as UK investors become more comfortable with international exposure, moving the funds closer to a true global market-cap weighting.
💰 THE FEE CUT: Alongside the rebalance, Vanguard is sweetening the deal for investors:
- OCF Reduction: Fees on the LifeStrategy range are dropping from 0.22% to 0.20%, effective Jan 27.
- New Product: The firm is also launching a “LifeStrategy Global” range, which will eliminate the UK tilt entirely for investors seeking pure global market neutrality.
🏛️ THE POLITICAL CONTEXT: The timing is notable. The move comes as the British government actively pursues reforms to encourage pension funds and asset managers to deploy more capital into domestic UK assets to boost the local economy. Vanguard’s decision effectively moves billions of pounds in structural demand away from the FTSE and Gilts, prioritizing investment logic over political objectives.
💡 ANALYST TAKEAWAY: This is a win for the “Passive Purists.” For years, critics argued that a 25% UK weighting was too high for an economy representing <4% of the global equity market. Vanguard is correcting this drift. While the UK government won’t like the optics, the fee cut and rebalance reinforce Vanguard’s core mission: minimizing cost and maximizing diversification, regardless of borders.
👇 Fund Selectors: Is a 20% home bias still too high for a UK investor, or is it the sweet spot for currency matching?