Vanguard Group News and Leadership

The Vanguard Group has a long history of leadership and innovation in the financial industry. Founded in 1975, the company has grown to become one of the largest investment management companies in the world.

Vanguard's leadership team has played a crucial role in shaping the company's vision and strategy. The company is led by CEO Mortimer Buckley, who has been at the helm since 2020.

Under Buckley's leadership, Vanguard has continued to expand its product offerings and services to meet the evolving needs of its clients. The company has also made significant investments in technology and data analytics to improve its investment management capabilities.

Vanguard's commitment to low-cost investing has been a key driver of its success. The company's index funds and ETFs have become extremely popular among investors due to their low fees and broad diversification.

Vanguard Group's company history is a fascinating story. John C. Bogle conducted a study in 1951 for his undergraduate thesis at Princeton University, which found that most mutual funds didn't earn more money compared to broad stock market indexes.

Bogle was hired by Wellington Management Company immediately after graduating from Princeton University in 1951. He became president in 1967 and CEO in 1970, but was fired in 1974 due to a failed merger.

Bogle's firing was a turning point in his career, as he learned a lot from the experience and went on to start a new fund division at Wellington, which he named Vanguard after HMS Vanguard, a British naval ship.

John C. Bogle's undergraduate thesis at Princeton University in 1951 was a pivotal moment in his career, as he discovered that most mutual funds didn't earn more money compared to broad stock market indexes.

Bogle graduated from Princeton University in 1951 and was immediately hired by Wellington Management Company. This marked the beginning of his journey in the asset management industry.

In 1966, Bogle forged a merger with a fund management group based in Boston, which would later shape the course of his career. He became president in 1967 and CEO in 1970, but the merger ultimately ended in failure.

Bogle was fired in 1974, but he learned a valuable lesson from the experience. He has said that if he hadn't been fired, there wouldn't have been a Vanguard.

Bogle arranged to start a new fund division at Wellington, which he named Vanguard after Horatio Nelson's flagship, HMS Vanguard. He chose this name after being inspired by a book about Great Britain's naval achievements.

Here's a brief overview of the countries where major asset management companies operate:

Bogle's determination and resilience ultimately led to the creation of Vanguard, a company that would go on to revolutionize the asset management industry.

The company's growth was a steady and deliberate process that spanned several decades. In the 1990s, the company expanded its product line to include new and innovative solutions that catered to the evolving needs of its customers.

The company's revenue more than doubled between 2000 and 2005, driven in part by the success of its flagship product. This growth was fueled by a significant increase in sales and marketing efforts.

During this period, the company also made strategic acquisitions to strengthen its position in the market. Notably, it acquired a smaller competitor in 2003, which helped to expand its customer base and increase its market share.

The company's growth was also marked by significant investments in research and development, which enabled it to stay ahead of the curve in terms of technology and innovation. This focus on R&D helped to drive new product development and improve existing ones.

As the company continued to grow and expand, it began to receive recognition for its achievements. In 2008, it was named one of the fastest-growing companies in the country by a leading business publication.

Vanguard launched its superannuation fund in Australia under the name Vanguard Super in November 2022.

The company has been expanding its reach in recent years, with a digital adviser launched in 2020 to help investors make informed decisions.

In 2020, Vanguard returned about $21 billion in managed assets to government clients in China due to concerns about legal compliance, staffing, and profitability.

This move was in response to criticism from the nonprofit group Coalition for a Prosperous America, which accused Vanguard of "acting as a pipeline through which US investment dollars are being funneled into Chinese military companies and corporations sanctioned over human rights abuses."

Vanguard's commitment to making investing regular, accessible, and affordable is evident in its fractional share program, launched in February 2021, which allows investors to buy ETFs for as little as $1.

In May 2017, Vanguard launched a fund platform in the United Kingdom, marking a significant expansion into international markets.

The company has a new CEO, Salim Ramji, who joined on July 8, 2024, succeeding Tim Buckley, and brings with him experience from BlackRock Inc.

Vanguard's new CEO, Ramji, will be held to a higher standard, as the company's main selling point is its client-first approach.

Vanguard's disciplined approach to fund launches is a key aspect of its client-first mentality, whereas BlackRock has been more willing to play in the short-term game.

Managing costs will be a significant challenge for Ramji, as Vanguard's size and complexity have increased over the years, leading to higher costs.

Vanguard's new CEO, Ramji, will be held to a higher standard due to the company's reputation for being client-first.

The company's main selling point has always been putting the client's needs above all else, and Ramji will need to uphold this mentality.

Vanguard's fund launches are a great example of this, as they're very disciplined and put out long-term investment solutions.

BlackRock, on the other hand, has been willing to launch short-term funds, like the bitcoin ETF and thematic funds, which is a very different approach.

Vanguard is a much bigger and more complex company than it was in the past, with many more clients, employees, and assets under management.

This increased size and complexity come with higher costs, which Ramji will need to manage in order to maintain Vanguard's reputation as a low-cost provider.

The company's business is doing very well, with index funds and actively managed funds both performing well, but Ramji will need to decide where to take the company next and how to disrupt the market in a client-friendly way.

The Vanguard STAR fund has undergone significant changes after 14 years. The asset manager has made adjustments to its $23bn fund of funds, the Vanguard STAR fund (VGSTX).

Vanguard has added the $52.6bn Vanguard Dividend Growth fund (VDIGX) and the $1.9bn Vanguard International Core fund (VWICX) to the equity sleeve. These funds have been added to achieve better style balance and reduce risk.

The Vanguard Explorer fund (VEXPX) has been removed from the equity sleeve. This change is aimed at improving the overall performance of the fund.

The Vanguard STAR fund is a 60/40 fund that invests in ten actively managed Vanguard funds. These funds are spread across domestic and international stock funds and US bond funds.

All of the equity allocations in VGSTX are subadvised funds. This means they are managed by Vanguard's subadvisory team, headed by Matthew Piro.