The Vanguard Group, Inc. is an asset management company in Malvern, Pennsylvania.
The company is the world’s largest mutual fund provider and the world’s second largest stock exchange traded fund provider, ranking second only to BlackRock’s iShares.
Vanguard Net Worth
Vanguard manages around $7 trillion worth of assets, with revenues of $6.936 billion.
John Clifton Bogle (a.k.a “Jack”) is regarded as one of the greatest American businessmen, investors, and philanthropists.
In addition to being the CEO and founder of The Vanguard Group, he was also the person who initiated the index fund concept.
He graduated from Princeton University with a degree in economics.
A brief history of Vanguard
Bogle founded Vanguard Investments in the 1970s as a subsidiary of Wellington Management Company. Bogle’s bad merger decision led to the creation of the fund.
Bogle was terminated from his position as group leader, yet he was still permitted to set up a new fund. The major condition for him to establish the new fund demanded that it does not engage in active management.
Bogle opted to launch a passive fund that would track the S&P 500 index in view of this limitation. A British ship called “Vanguard” inspired Bogle to name the fund. This fund was launched for the first time in 1975.
It took the fund some time to take off despite its initial slow growth. His index investing style was soon copied by other mutual funds. Also, passive and index investing have experienced rapid growth since then.
Vanguard Group; who owns it now?
The way Vanguard is structured is pretty unique. Vanguard is owned by the funds it manages. In turn, the funds managed by the company belong to its shareholders. That’s why Vanguard is actually owned by the shareholders.
Other than shareholders, it doesn’t have any outside investors. The majority of well-established investment firms operate as public companies.
Thanks to its structure, Vanguard funds have low fees. Because of its size, the company has maintained its costs down throughout the years. In 1975, Vanguard funds had an average expense ratio of 0.89%. This has dropped to 0.09% today.
Moreover, experts think Vanguard has a structure that makes it less likely to have conflicts of interest than other investment firms.