Vanguard has cut fees on its 36-strong range of index and exchanged-traded (ETFs), reducing the average ongoing charges figure (OCF) across its entire fund range, including its active portfolios, to 0.2% from 0.24% previously.

The latest round of cuts could reignite a price war that has both active and passive managers reducing fees in the face of mounting competition and regulatory pressures.

Vanguard’s 22-strong index fund line up will now levy an average of 0.15%, with its 13 ETFs on 0.1%. Combined, the average OCF across its passive funs is now 0.14%, down from 0.19% previously.

The OCF on Vanguard's UK Gilt ETF has dropped from 0.12% to 0.07%, on its US$ Corporate Bond 1-3 Year Bond ETF from 0.15% to 0.09%, while its FTSE Emerging Markets ETF is now 0.22%, down from 0.25%. 

In June, Vanguard reduced fees across its active fund range, with the OCF on its Global Equity, Global Equity Income and Global Balanced funds cut to 0.48% a year from 0.78%, and from 0.8% to 0.78% on its Global Emerging Market fund.

Sean Hagerty (pictured), head of Vanguard for Europe, said: ‘There is still a misconception that the more you pay for an investment, the better it performs.

‘In reality, costs really impact the returns investor make - every pound paid in fees is a pound off investors’ returns. Investors cannot control the markets, but they can control the fees they pay.’