US fund manager has reduced its exposure to UK equities as part of a number of changes to its popular LifeStrategy range of funds.
UK stocks worth £1.85 billion have been removed from the £52 billion fund range.
In total, Vanguard is reducing the fund’s UK equity allocation from 25% to 20% while also reducing UK bond exposure from 35% to 20%.
According to a Vanguard statement, the decision is designed to “encourage investors to hold diversified portfolios” and to be “more confident investing internationally”.
The decision is a blow to the UK government which has been looking to encourage more investment in domestic equities amid a period of stress for the country’s securities.
Among other changes announced by Vanguard is a cut in fees from 0.22% to 0.20% and the launch of a new range of global funds.
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