WikiDwarf: Created page with "{{short description|American investment management company}} {{for|the anarchist political group|Vanguard Group (anarchist)}} {{POV|date=June 2021}} {{Infobox company | name..."

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Created page with "{{short description|American investment management company}} {{for|the anarchist political group|Vanguard Group (anarchist)}} {{POV|date=June 2021}} {{Infobox company | name..."

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{{short description|American investment management company}}
{{for|the anarchist political group|Vanguard Group (anarchist)}}
{{POV|date=June 2021}}
{{Infobox company
| name = The Vanguard Group, Inc.
| logo = Vanguard.svg
| type = [[Privately held company]]<ref>{{Cite web |title=The Vanguard Group, Inc.: Private Company Information - Bloomberg |url=https://www.bloomberg.com/profile/company/5125Z:US |access-date=December 22, 2019 |website=www.bloomberg.com}}</ref>
| industry = [[Investment management]]
| foundation = {{Start date and age|1975|5|1}}
| founder = [[John C. Bogle]]
| location_city = [[Malvern, Pennsylvania]], U.S.
| location_country = United States
| key_people = [[Mortimer J. Buckley]] {{small|(Chairman & CEO)}}
| products = [[Mutual fund]]s [[Exchange-traded fund]]s [[Broker]] [[Asset management]] Sub-advisory services
| revenue = {{increase}} $6.936 billion (2020) <ref> https://www.dnb.com/business-directory/company-profiles.the_vanguard_group_inc.7cff952d65be1a3ab3ecf380e8c9787d.htm</ref>
| aum = {{Increase}} $7.1 trillion (2020) <ref>{{Cite web |url=https://www.ft.com/content/3b80cd1d-8913-4019-b6aa-b6f6ddb155a5|title=The Financial Times |date=January 12, 2021 |website=www.ft.com}}</ref>
| assets =
| num_employees = {{Increase}}17,600 (January 31, 2020)<ref name="fast-facts">{{Cite web |title=Fast facts about Vanguard |url=https://about.vanguard.com/who-we-are/fast-facts/ |access-date=March 5, 2019 |publisher=The Vanguard Group, Inc}}</ref>
| homepage = {{URL|http://www.vanguard.com}}
}}
'''The Vanguard Group, Inc.''' is an American [[registered investment advisor]] based in [[Malvern, Pennsylvania]] with about $7 trillion in global assets under management, as of January 13, 2021.<ref>{{Cite news|last=Flood|first=Chris|date=13 January 2021|title=Vanguard's assets hit record $7tn|website=[[Financial Times]]|url=https://www.ft.com/content/3b80cd1d-8913-4019-b6aa-b6f6ddb155a5|url-status=live|access-date=21 June 2021|archive-url=https://web.archive.org/web/20210621205510/https://www.ft.com/content/3b80cd1d-8913-4019-b6aa-b6f6ddb155a5|archive-date=21 June 2021}}</ref> It is the largest provider of [[mutual fund]]s and the second-largest provider of [[exchange-traded fund]]s (ETFs) in the world after [[BlackRock]]'s [[iShares]].<ref>{{Cite web |title=ETF League Tables - ETF.com |url=http://www.etf.com/sections/etf-league-tables.html |access-date=22 March 2017}}</ref> In addition to mutual funds and ETFs, Vanguard offers brokerage services, variable and fixed annuities, educational account services, financial planning, asset management, and trust services. Several mutual funds managed by Vanguard are ranked at the top of the [[list of US mutual funds by assets under management]].<ref>{{Cite web |title=Lipper Performance Report |url=http://www.diansfundfreebies.com/performance/lg25.pdf}}</ref> Along with BlackRock and [[State Street Corporation|State Street]], Vanguard is considered one of the Big Three index fund managers that dominate corporate America.<ref>{{Cite journal|last1=Bebchuk|first1=Lucian|author-link=Lucian Bebchuk|last2=Hirst|first2=Scott|date=2019|title=Index Funds and the Future of Corporate Governance: Theory, Evidence, and Policy|url=https://columbialawreview.org/content/index-funds-and-the-future-of-corporate-governance-theory-evidence-and-policy/|journal=[[Columbia Law Review]]|volume=119|issue=8|pages=2029–2146|ssrn=3282794}}</ref><ref>{{cite web |last1=McLaughlin |first1=David |last2=Massa |first2=Annie |title=The Hidden Dangers of the Great Index Fund Takeover |url=https://www.bloomberg.com/news/features/2020-01-09/the-hidden-dangers-of-the-great-index-fund-takeover |work=Bloomberg Businessweek |date=January 9, 2020 |access-date=June 7, 2021}}</ref>

Founder and former chairman [[John C. Bogle]] is credited with the creation of the first [[index fund]] available to individual investors and was a proponent and major enabler of low-cost investing by individuals,<ref name="firstindex">{{Cite web |date=April 1, 1997 |title=Lightning Strikes: The Creation of Vanguard, the First Index Mutual Fund, and the Revolution It Spawned |url=http://www.bfjlaward.com/pdf/25975/42-59_bogle_jpm_0918.pdf |publisher=Bogle Financial Markets Research Center}}</ref><ref name="tooworried">{{Cite news |last=Sommer |first=Jeff |date=August 11, 2012 |title=A Mutual Fund Master, Too Worried to Rest |work=[[New York Times]] |url=https://www.nytimes.com/2012/08/12/business/john-bogle-vanguards-founder-is-too-worried-to-rest.html |access-date=February 2, 2015}}</ref> though [[Rex Sinquefield]] has also been credited with the first index fund open to the public a few years before Bogle.<ref name="wsj-interview"/>

Vanguard is owned by the funds managed by the company and is therefore owned by its customers.<ref>{{Cite news |last=DiStefano |first=Joseph N. |title=Vanguard SEC filings drop 'at-cost,' 'no profit' claims that were dear to late founder John Bogle |language=en-US |work=The Philadelphia Inquirer |url=https://www.inquirer.com/columnists/john-bogle-vanguard-scraps-plain-talk-no-profit-at-cost-20190207.html |access-date=2019-10-04}}</ref> Vanguard offers two classes of most of its funds: ''investor shares'' and ''admiral shares''. Admiral shares have slightly lower [[expense ratio]]s but require a higher minimum investment, often between $3,000 and $100,000 per fund.<ref name="investo">{{Cite web |date=April 9, 2020 |title=Admiral Shares help keep your costs under control |url=https://investor.vanguard.com/mutual-funds/admiral-shares |publisher=[[Vanguard]]}}</ref> Vanguard's corporate headquarters is in Malvern, a suburb of [[Philadelphia]]. It has satellite offices in [[Charlotte, North Carolina]], and [[Scottsdale, Arizona]]. The company also has offices in Canada, Australia, Asia, and Europe.

==History==
===Formation===
In 1951, for his undergraduate thesis at [[Princeton University]], [[John C. Bogle]] conducted a study in which he found that most mutual funds did not earn more money compared to broad [[stock market index]]es.<ref>{{Cite web |last=Armbruster |first=Mark |date=October 14, 2016 |title=Comparing index mutual funds and active managers |url=http://www.armbrustercapital.com/wp-content/uploads/2017/02/Comparing-Index-Mutual-Funds-10-14-2016.pdf |publisher=Rochester Business Journal}}</ref> Even if the stocks in the funds beat the benchmark index, management fees reduced the returns to investors below the returns of the benchmark.<ref>{{Cite web |last=MacBride |first=Elizabeth |date=October 14, 2015 |title=Jack Bogle: Follow these 4 investing rules—ignore the rest |url=https://www.cnbc.com/2015/10/14/jack-bogle-follow-these-4-investing-rules-ignore-the-rest.html |publisher=[[CNBC]]}}</ref>

Immediately after graduating from Princeton University in 1951, Bogle was hired by [[Wellington Management Company]].<ref name="thinking">{{Cite web |last=Ferri |first=Rick |date=February 10, 2014 |title=What Was John Bogle Thinking? |url=https://www.forbes.com/sites/rickferri/2014/02/10/what-was-john-bogle-thinking/#5ed1c96968e7 |work=[[Forbes Magazine]]}}</ref> In 1966, he forged a merger with a fund management group based in Boston.<ref name=thinking/> He became president in 1967 and CEO in 1970.<ref name=thinking/> However, the merger ended badly and Bogle was therefore fired in 1974.<ref name=thinking/> Bogle has said about being fired: "The great thing about that mistake, which was shameful and inexcusable and a reflection of immaturity and confidence beyond what the facts justified, was that I learned a lot. And if I had not been fired then, there would not have been a Vanguard."<ref>{{Cite news |last=Boyle |first=Matthew |date=December 17, 2007 |title=Be prepared for a lot of bumps |publisher=[[Fortune Magazine]] |url=http://archive.fortune.com/magazines/fortune/fortune_archive/2007/12/24/101939724/index.htm}}</ref>

Bogle arranged to start a new fund division at Wellington. He named it Vanguard, after [[Horatio Nelson]]'s [[flagship]] at the [[Battle of the Nile]], {{HMS|Vanguard|1787|6}}.<ref>{{Cite web |last=Reklaitis |first=Victor |date=December 22, 2014 |title=5 things you don't know about Vanguard |url=http://www.marketwatch.com/story/5-things-you-dont-know-about-vanguard-2014-10-31 |website=[[MarketWatch]]}}</ref> Bogle chose this name after a dealer in antique prints left him a book about Great Britain's naval achievements that featured HMS ''Vanguard''. Wellington executives initially resisted the name, but narrowly approved it after Bogle mentioned that Vanguard funds would be listed alphabetically next to [[Wellington Fund|Wellington funds]].<ref name=firstindex/>

===Growth of company===
The Wellington executives prohibited the fund from engaging in advisory or fund management services. Bogle saw this as an opportunity to start a passive fund tied to the performance of the [[S&P 500]], which was established in 1957.<ref name=firstindex/><ref name=tooworried/> Bogle was also inspired by [[Paul Samuelson]], an economist who later won the [[Nobel Memorial Prize in Economic Sciences]], who wrote in an August 1976 column in ''[[Newsweek]]'' that retail investors needed an opportunity to invest in stock market indexes such as the S&P 500.<ref>{{Cite web |last=Mihm |first=Stephen |date=September 6, 2016 |title=How Index Funds Prevailed |url=https://www.bloomberg.com/view/articles/2016-09-06/how-index-funds-prevailed |publisher=[[Bloomberg L.P.]]}}</ref><ref>{{Cite web |last=Baldwin |first=William |date=January 21, 2015 |title=Is Vanguard Too Successful? |url=https://www.forbes.com/sites/baldwin/2015/01/21/is-vanguard-too-successful/ |work=[[Forbes Magazine]]}}</ref>

In 1976, after getting approval from the board of directors of Wellington, Bogle established the First
Index Investment Trust (now called the '''Vanguard 500''' Index Fund).<ref>{{Cite web |last=Culloton |first=Dan |date=August 9, 2011 |title=A Brief History of Indexing |url=http://news.morningstar.com/articlenet/article.aspx?id=390749 |publisher=[[Morningstar, Inc.|Morningstar]]}}</ref> This was one of the earliest [[passive investing]] index funds, proceeded a few years earlier by a handful of others (e.g., [[Jeremy Grantham]]'s Batterymarch Financial Management in Boston, and index funds managed by [[Rex Sinquefield]] at American National Bank in Chicago, and John "Mac" McCown at [[Wells Fargo]]'s San Francisco office.<ref>Justin Fox (2011). The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street. HarperBusiness, ISBN 9780060599034</ref><ref name="wsj-interview">{{cite web|url=https://www.wsj.com/articles/SB10001424052970203897404578078551936968168|title=The Weekend Interview with Rex Sinquefield: Meet One of the Super-PAC Men|last=Riley|first=Naomi Schaefer|date=October 26, 2012|work=WSJ|accessdate=December 30, 2015|url-access=subscription }}</ref> Bogle's S&P 500 index raised $11 million in its [[initial public offering]], compared to expectations of raising $150 million.<ref>{{Cite web |last1=Bogle |first1=John |last2=Rafalaf |first2=Andrew |date=October 1, 2002 |title=A Wall Street Revolution |url=https://money.cnn.com/magazines/fsb/fsb_archive/2002/10/01/330578/index.htm |website=[[Fortune Magazine]] |publisher=[[CNN]]}}</ref> The banks that managed the public offering suggested that Bogle cancel the fund due to the weak reception, but Bogle refused.<ref name=firstindex/><ref name=tooworried/> At this time, Vanguard had only three employees: Bogle and two analysts. Asset growth in the first years was slow, partially because the fund did not pay commissions to brokers who sold it, which was unusual at the time. Within a year, the fund had only grown to $17 million in assets, but one of the Wellington Funds that Vanguard was administering had to be merged in with another fund, and Bogle convinced Wellington to merge it in with the Index fund.<ref name=firstindex/><ref name=tooworried/> This brought assets up to almost $100 million.

Growth in assets accelerated after the beginning of a [[bull market]] in 1982, and the indexing model became more popular at other companies. These copy funds were not successful since they typically charged higher fees, which defeated the purpose of index funds. In December 1986, Vanguard launched its second mutual fund, a bond index fund called the Total Bond Fund, which was the first bond index fund ever offered to individual investors.<ref>{{Cite book |last=Bogle |first=John C. |url=https://books.google.com/books?id=9WmHM2y8AEEC&pg=PT149 |title=The Clash of the Cultures: Investment vs. Speculation |date=July 5, 2012 |publisher=John Wiley & Sons |isbn=9781118238219}}</ref> One earlier criticism of the first Index fund was that it was only an index of the S&P 500.<ref name=firstindex/><ref name=tooworried/> In December 1987, Vanguard launched its third fund, the Vanguard Extended Market Index Fund, an index fund of the entire stock market, excluding the S&P 500.<ref>{{Cite web |title=Quick Guide to Vanguard Extended Market Index Investor Fund |url=https://www.zacks.com/stock/news/209454/quick-guide-to-vanguard-extended-market-index-investor-fund-vexmx |publisher=Zacks}}</ref> Over the next five years, other funds were launched, including a small-cap index fund, an international stock index fund, and a total stock market index fund. During the 1990s, more funds were offered, and several Vanguard funds, including the S&P 500 index fund and the total stock market fund, became among the largest funds in the world, and Vanguard became the largest mutual fund company in the world.<ref>{{Cite book |last=Godin |first=Seth |url=https://archive.org/details/ifyourecluelessa00godi |title=If You're Clueless about Mutual Funds and Want to Know More |date=1997 |publisher=Dearborn Financial Publishing, Inc. |page=[https://archive.org/details/ifyourecluelessa00godi/page/98 98] |url-access=registration}}</ref> Noted investor [[John Neff]] retired as manager of Vanguard's Windsor Fund in 1995, after a 30-year career in which his fund beat returns of the S&P 500 index by an average of 300 basis points per year.<ref>{{Cite web |last=Loth |first=Richard |title=The Greatest Investors: John Neff |url=http://www.investopedia.com/university/greatest/johnneff.asp |publisher=[[Investopedia]]}}</ref>

===Recent===
Bogle retired from Vanguard as chairman in 1999 when he reached the company's mandatory retirement age of 70 and he was succeeded by John J. ("Jack") Brennan.<ref>{{Cite web |last=Costello |first=Martine |date=August 12, 1999 |title=Vanguard's Bogle retires |url=https://money.cnn.com/1999/08/12/mutualfunds/funds_vanguard/ |publisher=[[CNN]]}}</ref> In February 2008, F. William McNabb III became President<ref>{{Cite web |date=February 22, 2008 |title=McNabb To Succeed Brennan At Vanguard |url=https://www.forbes.com/2008/02/22/vanguard-mcnabb-brennan-face-markets-cx_pm_0222autofacescan02.html |work=[[Forbes Magazine]]}}</ref> and in August 2008, he became CEO.<ref>{{Cite news |date=December 14, 2009 |title=Executive Moves |publisher=Money Management Executive |url=http://www.mmexecutive.com/issues/2009_48/-200787-1.html}}</ref> Both of Bogle's successors expanded Vanguard's offerings beyond the index mutual funds that Bogle preferred, in particular into [[exchange traded funds]] (ETFs) and actively managed funds.<ref>{{Cite web |title=Index funds vs. actively managed funds {{!}} Vanguard |url=https://investor.vanguard.com/index-funds/index-vs-active |access-date=2020-05-19 |website=investor.vanguard.com}}</ref> Some of Vanguard's actively-managed funds predate Bogle's retirement however (their healthcare stock fund began in 1984).<ref>[https://investor.vanguard.com/mutual-funds/profile/VGHCX Vanguard Health Care Fund Investor Shares (VGHCX)] Vanguard.com, accessed 09 July 2021</ref> Bogle had been skeptical of ETF's as they trade mid-day like single stocks while mutual funds trade on a single price at day's end. He believed [[buy and hold]] investors could make good use of ETFs tracking broad indices, but thought ETFs had potentially higher fees due to the [[bid ask spread]], could be too narrowly specialized, and worried anything that ''could'' be traded mid-day ''would'' be traded mid-day, potentially reducing investor returns.<Ref>Christine Benz (2010). [https://www.morningstar.com/articles/355645/bogle-buy-and-hold-dont-trade-etfs Bogle: Buy and Hold, Don't Trade ETFs]. Morningstar.com, accessed 09 July 2021</ref>

In May 2017 Vanguard launched a [[fund platform]] in the United Kingdom.<ref>{{Cite news |last=Ricketts |first=David |title=Hargreaves hit as Vanguard goes direct to man on the street |language=en-GB |url=https://www.fnlondon.com/articles/vanguard-goes-direct-to-man-on-the-street-in-new-price-war-20170516 |access-date=2019-10-04}}</ref>

In July 2017, it was announced that McNabb would be replaced as chief executive officer by chief investment officer [[Mortimer J. Buckley]], effective January 1, 2018.<ref>{{Cite web |last=Smith |first=Peter |date=July 13, 2017 |title=Tim Buckley to succeed Bill McNabb as Vanguard chief |url=https://www.ft.com/content/646dd648-67d2-11e7-8526-7b38dcaef614?mhq5j=e3 |access-date=July 14, 2017 |website=Financial Times}}</ref> McNabb remains at the company as chairman.<ref>{{Cite news |last=Moyer |first=Liz |date=2017-07-13 |title=Vanguard, manager of $4.4 trillion and leader in the index fund business, is getting a new CEO |work=CNBC |url=https://www.cnbc.com/2017/07/13/vanguard-ceo-f-william-mcnabb-to-step-down.html |access-date=2018-01-26}}</ref>

In 2020, Vanguard rolled out a digital adviser and began building up an investment team in China.<ref>{{Cite web |authors=Robin Wigglesworth, Richard Henderson |date=12 January 2020 |title=Vanguard and the US financial system: too big to be healthy? |url=https://www.ft.com/content/9414052a-3142-11ea-9703-eea0cae3f0de |access-date=21 December 2020 |website=Financial Times}}</ref> In October 2020, Vanguard returned about $21 billion in managed assets to government clients in China due to concerns about legal compliance, staffing and profitability.<ref>{{Cite web |last=Bloomberg News |title=Vanguard Returns $21 Billion in Assets to China State Funds |url=https://www.bloomberg.com/news/articles/2020-10-09/vanguard-returns-21-billion-in-assets-to-china-s-state-funds |archive-url=https://web.archive.org/web/20201012055340/https://www.bloomberg.com/news/articles/2020-10-09/vanguard-returns-21-billion-in-assets-to-china-s-state-funds |archive-date=11 October 2020 |access-date=11 October 2020 |website=Bloomberg}}</ref>

==See also==
* [[List of exchange-traded funds]]
* [[List of mutual-fund families in the United States]]
* [[Money market]]
* [[Mutual fund fees and expenses]]

==References==
{{reflist}}

==External links==
* [https://www.vanguard.com Official website]

{{Philadelphia Corporations}}
{{Online brokerages}}{{investment-management}}{{Normdaten}}

{{DEFAULTSORT:Vanguard Group, The}}
[[Category:The Vanguard Group| ]]
[[Category:1975 establishments in Pennsylvania]]
[[Category:American companies established in 1975]]
[[Category:Companies based in Chester County, Pennsylvania]]
[[Category:Exchange-traded funds]]
[[Category:Financial services companies established in 1975]]
[[Category:Investment management companies of the United States]]
[[Category:Mutual funds of the United States]]
[[Category:Online brokerages]]
[[Category:Privately held companies based in Pennsylvania]]
[[Category:Webby Award winners]]

The Vanguard Group - Revision history

WikiDwarf: Created page with "{{short description|American investment management company}} {{for|the anarchist political group|Vanguard Group (anarchist)}} {{POV|date=June 2021}} {{Infobox company | name..."