In this review, I’ll be comparing InvestEngine vs Vanguard, two of the leading fund investment platforms in the UK.
I’ll be putting Vanguard and InvestEngine head-to-head on a number of metrics in this comparison to see which comes out on top. This includes products, funds, managed portfolios, ethical offerings and, of course, fees.
Funds are one of the lowest cost forms of investment and most investors want to get the best possible return on their money for the least cost. As an experienced investor and a Chartered Accountant, I know how important it is to balance costs against returns!
OFFER: Get a Welcome Bonus of up to £50 when you invest at least £100 with InvestEngine by signing up via our link. Ts&Cs apply. Capital at risk if you invest.
Read on for our full InvestEngine vs Vanguard comparison, or use the links below to jump straight to a particular section.
- InvestEngine vs Vanguard: At A Glance
- InvestEngine vs Vanguard: Fees
- InvestEngine vs Vanguard: Products
- InvestEngine vs Vanguard: Funds & Portfolios
- InvestEngine vs Vanguard: Ethical Funds & Portfolios
- InvestEngine vs Vanguard: Performance
- InvestEngine vs Vanguard: Research, Tools & Advice
- InvestEngine vs Vanguard: Which Has The Better App?
- InvestEngine vs Vanguard: Is My Money Safe?
- InvestEngine vs Vanguard: Pros & Cons
- InvestEngine vs Vanguard: The Winner
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InvestEngine vs Vanguard: At A Glance
Here’s my overview of Vanguard vs InvestEngine in case you don’t want to read the whole comparison.
The table below looks at the key features compared against each other.
|Management Fees||Zero fees for DIY investments|
0.25% management fee for managed investments
|0.15% (capped at £375 per year for accounts over £250k)|
0.60% for Managed ISA (includes 0.15% platform fee)
Avg. 0.15% in DIY Portfolios
|0.20% average fund cost|
|Minimum Investment||£100||£500 or £100 per month|
|Products||Stocks & Shares ISA|
|Stocks & Shares: ISA, JISA|
|Number Of Ready-Made Portfolios||10 Managed Portfolios||5 Life Strategy Funds|
11 Target Retirement Funds
5 Managed ISA portfolios
|Ethical Funds / Portfolios||100+ ESG funds||17 ESG funds|
|Individual Funds||550+ (including over 100 ESG funds)||87 (including 17 ESG funds)|
Both Vanguard and InvestEngine specialise in investing in funds, meaning you cannot buy individual shares or bonds with either platform.
InvestEngine only offers Exchange Traded Funds so you cannot invest in mutual funds or investment trusts with them. On the other hand, Vanguard offers a mix of ETFs and investment trusts but only their own funds.
Vanguard recently launched a Managed ISA service, essentially its version of robo-investing. It has 5 portfolios to choose from based on risk levels. InvestEngine has 10 risk-based portfolios to choose from, so it has a slightly wider choice.
On cost, InvestEngine is the clear winner whether you want to build your own portfolio or invest in a managed portfolio. In fact, it’s cheaper to invest in Vanguard’s funds through InvestEngine than it is through Vanguard.
In addition, InvestEngine is the winner on the number of funds on offer as it has over 550 ETFs to choose from, compared to just 80+ funds with Vanguard. You’re also restricted to just Vanguard’s own funds on its platform.
However, you can invest in actively managed mutual funds through Vanguard which you cannot do with InvestEngine. These include its popular LifeStrategy and Target Retirement funds. If you’re interested in investing in these funds, you’ll prefer Vanguard.
On the other hand, neither platform has a great range of products. InvestEngine is limited to a Stocks & Shares ISA, a GIA and a business account. Vanguard only goes one better by also offering a Junior ISA.
If you want a wider set of products, such as a Junior SIPP and a LISA, then you will prefer alternative investment platforms such as Hargreaves Lansdown. The same applies if you also would like to invest in individual shares and a much wider range of funds, albeit at higher cost.
What is InvestEngine?
InvestEngine is a UK based investment platform which allows you to invest in Exchange Traded Funds (ETFs). You can do so either by picking which ETFs to invest in to build your own portfolio or via InvestEngine’s managed portfolios.
As of April-23, InvestEngine has more than 23,000 users and over £175m in Assets Under Administration (AUA).
There are over 550 ETFs available to invest in through InvestEngine’s platform, including over 40 of Vanguard’s funds.
Read our in-depth, independent InvestEngine review for more.
What is Vanguard?
Vanguard was founded in the USA in 1975 and is known for creating the first index fund. An Index fund is a passive investment vehicle which seeks to track the performance of a major index over time, rather than picking individual companies to invest in.
Index funds are now hugely popular and are often the lowest cost type of fund to invest in. Vanguard now has over 30 million investors worldwide, and offers 87 funds to UK investors to choose from on its platform.
InvestEngine vs Vanguard: Fees
Let’s look in more detail at costs for Vanguard vs InvestEngine.
Both InvestEngine and Vanguard have simple fee structures, but InvestEngine is the clear winner when it comes to costs:
|Platform Fees||No fees for DIY investing||0.15%|
Capped at £375 for investments over £250k
|Actively Managed Portfolio Management Fees||0.25% Managed Portfolio fee||0.60% Managed ISA fee made up of:|
-Management fee: 0.30%
-Platform fee: 0.15%
-Fund fees: 0.15%
0.15% average in Managed Portfolios, plus 0.07% average spread
|Ethical / Socially Responsible Fund Fees||0.07%-0.89%||0.11%-0.48%|
If you’re happy picking your own investments, then InvestEngine is the cheaper option for you as it does not charge any platform or management fees. You simply pay the annual ETF costs, made up of the fund fees and market spread.
With Vanguard, however, you would pay a 0.15% platform fee on top of the fund costs, making it the more expensive option.
For Managed Portfolios, which are essentially a robo-advisor investment service, InvestEngine again beats Vanguard on cost. InvestEngine’s managed portfolio fee is 0.25% compared to Vanguard’s 0.60%.
This means that InvestEngine is the cheaper option for both picking your own investments and for managed portfolios, regardless of how much capital you have to invest.
In fact, it’s actually cheaper to invest in individual Vanguard funds through InvestEngine than it is through Vanguard’s platform.
For example, you can invest in Vanguard’s S&P 500 index fund through InvestEngine and pay only the 0.07% fund costs. To do so through Vanguard would incur their 0.15% platform fee on top of the fund costs.
Furthermore, InvestEngine provides a huge range of over 550 ETFs to invest in, including over 40 Vanguard funds. With Vanguard, you can only invest in Vanguard’s own funds, although it has over 80 on its platform.
InvestEngine vs Vanguard: Products
Vanguard and InvestEngine both offer Stocks & Shares ISAs and General Investment Accounts (GIAs).
However, unlike InvestEngine, Vanguard also offers Self-Invested Personal Pensions (SIPPs) and Junior ISAs (JISAs), so it has a wider range of products on offer. Therefore if you want to invest your pension or JISA into Vanguard funds, you will prefer Vanguard vs InvestEngine.
Despite the lack of SIPPs and JISAs, InvestEngine does offer a business account for companies wishing to invest their cash. This is somewhat unique among retail investment platforms, and is an option to consider if you’re running a company.
Overall, the product offering of both providers could be better. Neither offers a Lifetime ISA or a Junior SIPP, for example, which many other investment apps and platforms do. For example, Hargreaves Lansdown offers a wide choice of products, including a Lifetime ISA, Junior SIPP and Cash ISA.
That being said, InvestEngine is a relatively new platform and may seek to add more products in the future.
InvestEngine vs Vanguard: Funds & Portfolios
Both InvestEngine and Vanguard allow you to pick from their range of funds and build your own investment portfolio.
The crucial difference in funds is that Vanguard only offers its own funds to choose from, whereas InvestEngine provides over 550 ETFs from a range of fund managers, including over 40 of Vanguard’s funds. If you prefer a wider choice of ETFs to invest in, you’ll prefer InvestEngine.
On the other hand, Vanguard is one of the world’s largest fund managers and some of its funds are hugely popular. With Vanguard you’ll have access to its well-known LifeStrategy and Target Retirement funds, which are actively managed funds. These are a popular set of funds which, combined, have tens of billions of pounds invested in them.
Vanguard’s LifeStrategy and Target Retirement funds are not available through InvestEngine as they are unit trusts rather than ETFs. If you are particularly interested in putting your money into these funds, you will therefore prefer Vanguard.
With InvestEngine you can also make use of fractional investing. This allows you to invest in funds with as little as £1, although the overall minimum deposit to open an account is £100. But this allows you to experiment with small amounts of money if you so wish.
Vanguard offers 5 ready-made portfolios to choose from in its Managed ISA, each with differing risk levels. These portfolios are managed by Vanguard and monitored monthly. Vanguard’s managed portfolio service is only available in an ISA.
In addition, Vanguard offers 5 LifeStrategy funds which are very popular in the investment management industry, and 11 Target Retirement Funds. You can choose to invest in these as part of creating your own portfolio. Performance histories are available on Vanguard’s website.
By contrast, InvestEngine’s Managed Portfolio option has 10 ‘Growth’ portfolios to choose from, each also with a different risk level. Each portfolio is managed and rebalanced by InvestEngine over time.
As an aside, InvestEngine previously offered ‘Income’ portfolios as well as ‘Growth’ portfolios. This was a unique feature among investment platforms but with interest rates rising, income-seeking portfolios tend to become inherently riskier. As a result, Income portfolios are now closed to new investors.
Both Vanguard’s and InvestEngine’s managed options work in a fundamentally similar way, with a questionnaire followed by a recommended portfolio based on your risk preferences.
There are two main differences with their managed portfolios. First is that InvestEngine offers twice the number of managed portfolios than Vanguard, which you may prefer if you like the idea of having a greater range of risk levels to choose from.
Secondly, InvestEngine’s managed portfolios are put together from a much wider range of funds than Vanguard’s. InvestEngine has over 550 ETFs to choose from, whereas a Vanguard portfolio will only be constructed from its own 80 funds. This does not necessarily have any bearing on performance, though.
InvestEngine vs Vanguard: Ethical Portfolios
Environmental, Social and Governance (ESG) investing or Socially Responsible Investing (SRI) is becoming commonplace in the investment management industry. Investors want increased visibility over their investments to ensure that they align with their values.
InvestEngine and Vanguard both offer a range of individual ESG funds, however neither platform currently offers an ethical or ESG managed portfolio.
Vanguard has 17 of its own ESG funds available on its platform to invest in while InvestEngine has over 100 ESG funds to choose from.
To build your own ESG portfolio you will therefore have to pick which funds you want to invest in yourself with both InvestEngine and Vanguard.
Typically, fees are slightly higher with ESG funds and with Vanguard they range from 0.11%-0.48%. With InvestEngine, ESG fund fees range from 0.07%-0.89%.
Overall, the cost of ESG funds will depend on your investment choices. However, InvestEngine has the greater range of ESG funds to pick from.
InvestEngine vs Vanguard: Performance
As both Vanguard and InvestEngine provide individual funds to choose from, their performance cannot directly be compared.
Vanguard launched its Managed ISA service in December 2022, so there is not enough performance data to assess. However, you can view the past performance of each of Vanguard’s funds on its website.
I was unable to find historical performance data for InvestEngine’s 10 Managed portfolios. These portfolios are constructed by using the same ETFs but with different asset allocations for each. For example, Portfolio 10 – the highest risk portfolio – has an allocation of 93% to equities and 7% to bonds.
You can, however, see the historical performance of individual ETFs in the InvestEngine platform.
InvestEngine vs Vanguard: Research, Tools and Advice
As both platforms specialise in fund investing, neither offers a huge amount in the way of research and tools.
There are basic investment guides and introductory content on the websites of both InvestEngine and Vanguard. This includes some useful explanations on ETFs on InvestEngine’s website, but this is no surprise as ETF investing is their USP.
If you would prefer an investment platform with a wider range of tools, you may be interested in Hargreaves Lansdown and Fineco Bank. Both platforms offer huge amounts of data and market information that you can use, including price alerts and charts.
InvestEngine vs Vanguard: Which Has The Better App?
Vanguard does not have an app, so you’ll have to accept logging in online through its website to track your investments.
However, InvestEngine does have an app and it’s essentially a replica of the website interface. I view this as a benefit, because InvestEngine’s offering is simple and the app and website layout and interface reflects that.
You’re able to clearly see your portfolio on the home screen, and browse through the entire range of ETFs on offer through one of the tabs in the app.
If you want to be able to track your investments through a mobile app, then InvestEngine is the winner.
InvestEngine vs Vanguard: Is My Money Safe?
Both Vanguard and InvestEngine are regulated by the Financial Conduct Authority (FCA) and have Financial Services Compensation Scheme (FSCS) protection.
This means that if either company were to go bust, your money would be protected up to the value of £85,000 by the regulator.
It should be noted that some of the funds offered by Vanguard are located outside of the UK and therefore may not necessarily be covered by FSCS protection. You can check this in the Key Investor Information Document that each fund must provide.
InvestEngine vs Vanguard: Pros & Cons
To summarise my comparison of InvestEngine vs Vanguard, I’ve outlined below what I believe are the main pros and cons of each investment platform.
InvestEngine Pros & Cons
- Lower cost DIY investing vs Vanguard
- Lower cost managed portfolios vs Vanguard
- Over 550 ETFs to choose from
- Over 100 ESG funds, plenty to build your own ESG portfolio
- Simple and easy-to-use app
- Wider range of ready-made portfolios than Vanguard
- On the flip side, it only offers ETFs so you cannot invest in mutual funds, investment trusts or stocks and shares
- Does not offer ready-made ethical/ESG portfolios
- Lack of wider ISA and pension options – cannot currently open a JISA, LISA or SIPP
- Lack of performance history for its 10 managed portfolios
Vanguard Pros & Cons
- Over 80 of its own funds to choose from – only 40 or so Vanguard funds are available through InvestEngine
- Able to invest in Vanguard’s actively managed funds, such as LifeStrategy, as well as ETFs
- Long-established leading investment manager with millions of clients worldwide
- On the flip side, it’s more expensive than InvestEngine, even when investing in Vanguard’s own funds
- Can only invest in Vanguard’s own funds on its platform, so somewhat restricted in investment options
- No app, website platform only
- Has fewer managed portfolios to choose from (5 vs InvestEngine’s 10 portfolios)
- Lack of performance history on its managed portfolios as they only launched in Dec-22
- Does not offer a LISA or Junior SIPP
InvestEngine vs Vanguard: The Winner
For both building your own fund portfolio and for managed portfolios, InvestEngine is the winner. It has a wider range of ETFs to choose from than Vanguard and, crucially, is cheaper for any level of investment.
In fact, it will be interesting to see how long InvestEngine’s costs stay this low, as several other start-up investment platforms, such as Plum and Freetrade, have gradually increased prices over time. For now, though, InvestEngine represents the lowest cost DIY and Managed portfolio investing of all major platforms – so long as you’re happy to be limited to ETFs.
OFFER: Get a Welcome Bonus of up to £50 when you invest at least £100 with InvestEngine (Ts&Cs apply). Capital at risk if you invest.
That being said, Vanguard offers its investment trusts as well as ETFs. If you want to invest in Vanguard’s popular LifeStrategy funds, for example, then you will prefer Vanguard as they’re not available through InvestEngine. Overall, Vanguard is the more expensive option though and has a smaller range of funds to choose from.
Beyond investing in just funds, you may want to consider Hargreaves Lansdown for a comprehensive offering across thousands of stocks and shares, funds and bonds, although its costs are generally higher than InvestEngine and Vanguard.