The world’s second largest asset manager, which manages £4.7trn of assets, has cut fees on 13 exchange traded funds (ETFs), 22 index funds and the Vanguard Sterling Short-Term Money Market fund.

Vanguard is known for pioneering cheap passive investing, but it also runs 11 actively managed funds available to UK investors.

From today, the average investor will pay a fee of 0.20 per cent down from 0.24 per cent. This covers the entire Vanguard range, including active and passive funds.

The average fee for ETFs and index funds only has gone down to 0.14 per cent from 0.19 per cent.

The cuts follow reductions in May to Vanguard’s UK domiciled actively managed fund range. The Vanguard Global Equity, Vanguard Global Equity Income and the Vanguard Global Balanced funds were cut from 0.6 per cent to 0.48 per cent, while the fee on the Vanguard Global Emerging Markets fund was lowered by 0.02 per cent to 0.78 per cent.

Sean Hagerty, head of Vanguard for Europe, said: “For too long, investors have been poorly served with high-cost, complex investments.

“There is still a misconception that the more you pay for an investment, the better it performs. In reality, costs really impact the returns investors make – every pound paid in fees is a pound of investors’ returns.

“Investors cannot control the markets, but they can control the fees they pay.”