Asset manager Vanguard has "decisively undercut the market" with a new range of retail funds, as the asset management industry acknowledges that investors need a bigger share of the gains that are made with their money - a recognition that is likely to have significant long-term consequences for the sector.

The manager, which runs more than $1.8 trillion, has begun to market five funds of index funds to UK retail investors. Each fund is invested in a mix of global equity and UK bond index funds, with the allocation to equity ranging from 20% to 100%, so the investor can choose the fund they want according to their appetite for risk. The funds will be rebalanced automatically for the investor, to maintain the desired split between equities and bonds.