 | |
| Company type | Private[1] |
|---|---|
| Industry | Investment management |
| Founded | May 1, 1975; 50 years ago (1975-05-01) |
| Founder | John C. Bogle |
| Headquarters | Malvern, Pennsylvania, U.S. |
Key people |
|
| Products | |
| AUM |  US$11 trillion (as of September 01, 2025)[2] |
Number of employees | 20,000 (as of December 31, 2024)[3] |
| Website | investor |
The Vanguard Group, Inc. is an Americanregistered investment adviser founded on May 1, 1975, and based inMalvern, Pennsylvania, with about $11 trillion in globalassets under management as of January 31, 2025.[2][4] It is the largest provider ofmutual funds and the second-largest provider ofexchange-traded funds (ETFs) in the world afterBlackRock'siShares.[5][6] In addition to mutual funds and ETFs, Vanguard offers brokerage services, educational account services, financial planning, asset management, and trust services. Several mutual funds managed by Vanguard are ranked at the top of thelist of mutual funds in the United States by assets under management.[7] Along withBlackRock andState Street, Vanguard is considered to be one of the Big Three index fund managers that play a dominant role in retail investing.[8][9]
Founder and former chairmanJohn C. Bogle is credited with the creation of the firstindex fund available to individual investors and was a proponent and major enabler of low-cost investing by individuals,[10][11] thoughRex Sinquefield has also been credited with the first index fund a few years before Bogle.[12]
Vanguard is owned by the funds managed by the company and is therefore owned by its customers.[13] Vanguard offers two classes of most of its funds:investor shares andadmiral shares. Admiral shares have slightly lowerexpense ratios but require a higher minimum investment, often between $3,000 and $100,000 per fund.[14] Vanguard's corporate headquarters is in Malvern, a suburb ofPhiladelphia. It has satellite offices inCharlotte, North Carolina,Dallas, Texas,Washington D.C., andScottsdale, Arizona, as well as Canada, Australia, Asia, and Europe.
In 1951, for his undergraduate thesis atPrinceton University,John C. Bogle conducted a study in which he found that most mutual funds did not earn more money compared to broadstock market indexes.[15] Even if the stocks in the funds beat the benchmark index, management fees reduced the returns to investors below the returns of the benchmark.[16]
Immediately after graduating from Princeton University in 1951, Bogle was hired byWellington Management Company.[17] In 1966, he forged a merger with a fund management group based in Boston.[17] He became president in 1967 and CEO in 1970.[17] However, the merger ended badly and Bogle was therefore fired in 1974.[17] 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."[18]
Bogle arranged to start a new fund division at Wellington. He named it Vanguard, afterHoratio Nelson'sflagship at theBattle of the Nile,HMS Vanguard.[19] Bogle chose this name after a dealer in antique prints left him a book about Great Britain's naval achievements that featured HMSVanguard.[20] Wellington executives initially resisted the name, but narrowly approved it after Bogle mentioned that Vanguard funds would be listed alphabetically next toWellington Funds.[10]
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 theS&P 500, which was established in 1957.[10][11] Bogle was also inspired byPaul Samuelson, an economist who later won theNobel Memorial Prize in Economic Sciences, who wrote in an August 1976 column inNewsweek that retail investors needed an opportunity to invest in stock market indexes such as the S&P 500.[21][22]
In 1976, after getting approval from the board of directors of Wellington, Bogle established the FirstIndex Investment Trust (now called theVanguard 500 Index Fund).[23] This was one of the earliestpassive investing index funds, preceded a few years earlier by a handful of others (e.g.,Jeremy Grantham'sBatterymarch Financial Management in Boston, and index funds managed byRex Sinquefield at American National Bank in Chicago, and John "Mac" McQuown atWells Fargo's San Francisco office).[24][12]
Bogle's S&P 500 index raised $11 million in itsinitial public offering, compared to expectations of raising $150 million.[25] The banks that managed the public offering suggested that Bogle cancel the fund due to the weak reception, but Bogle refused.[10][11] 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.[10][11] This brought assets up to almost $100 million.
Growth in assets accelerated after the beginning of abull 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 November 1984, Vanguard launched the Vanguard Primecap fund in collaboration withPrimecap.[26] 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.[27] One earlier criticism of the first Index fund was that it was only an index of the S&P 500.[10][11] 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.[28] 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.[29] Noted investorJohn 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 (3%) per year.[30]
In March 2021, Vanguard joined over 70 asset managers, aiming to have companies within their portfolios to achievenet-zero emissions by 2060, a goal that parallels theParis Agreement.[31]Climate and Indigenous advocates felt optimistic about this development, but stressed the issue that Vanguard must also stop investing in companies that engage indeforestation,fossil fuel extraction, andenvironmental degradation. In line with theirsustainability efforts, Vanguard has put out a number of statements aimed at tacklingclimate change within their portfolios and the world at large. Despite these statements, the company continues to have companies within their investor portfolios that contribute to fossil fuel production and the furtherance of climate change, such asENAP Sipetrol,China National Petroleum Corporation (CPNC), andPetroamazonas.[32]
In terms of financial involvement, Vanguard held at least $86 billion in coal in 2021,[33] making them the world's number one investor in the industry. Additionally, according to Amazon Watch, in the same year, the company held $2.6 billion in debt and $9.6 billion in equities[32] for oil companies currently working within the Amazon rainforest.
Bogle retired from Vanguard as chairman in 1999 when he reached the company's mandatory retirement age of 70 and he was succeeded byJohn J. ("Jack") Brennan.[34] In February 2008, F. William McNabb III became President[35] and in August 2008, he became CEO.[36] Both of Bogle's successors expanded Vanguard's offerings beyond the index mutual funds that Bogle preferred, in particular intoexchange traded funds (ETFs) and actively managed funds.[37] Some of Vanguard's actively-managed funds predate Bogle's retirement however (their healthcare stock fund began in 1984).[38] Bogle had been skeptical of ETFs as they trade mid-day like single stocks while mutual funds trade on a single price at day's end. He believedbuy and hold investors could make good use of ETFs tracking broad indices, but thought ETFs had potentially higher fees due to thebid ask spread, could be too narrowly specialized, and worried anything thatcould be traded mid-daywould be traded mid-day, potentially reducing investor returns.[39]
In May 2017 Vanguard launched afund platform in the United Kingdom.[40]
In July 2017, it was announced that McNabb would be replaced as chief executive officer by chief investment officerMortimer J. Buckley, effective January 1, 2018.[41] McNabb remains at the company as chairman.[42]
In 2020, Vanguard rolled out a digital adviser and began building up an investment team in China.[43] 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.[44] In response to its China investments, theFinancial Times reported that the nonprofit groupCoalition for a Prosperous America criticized Vanguard for "acting as a pipeline through which US investment dollars are being funneled into Chinese military companies and corporations sanctioned over human rights abuses."[45]
In February 2021, Vanguard launched its fractional share program of its exchange-traded funds, or ETFs, where investors can invest for as little as $1. Fractional share ownership is a derivative ofmicro-investing, a type of investment strategy that is designed to make investing regular, accessible and affordable, especially for those who may not have a lot of money to invest or who are new to investing.[46][47]
In November 2022, Vanguard launched itssuperannuation fund in Australia under the name Vanguard Super.[48]
On May 14, 2024, Vanguard announced the appointment of Salim Ramji, a veteran fromBlackRock Inc., as its nextCEO, succeedingTim Buckley. Ramji, the first outsider to lead Vanguard, assumed his role on July 8, 2024.[49][50]
Vanguard is one of the top five shareholders inKernel Holding, anagribusiness that is the largest producer and exporter of grains inUkraine.[51][52] Vanguard has been donating tohumanitarian aid causes in Ukraine as a response to theRusso-Ukrainian War and implementingeconomic sanctions againstRussia.[53]
In June 2025, Vanguard was included in a UN expert's report of companies supporting Israel'swar in Gaza andoccupation of Palestinian territories.[54] Vanguard was identified in a UN report as one of the largest institutional investors in companiesproviding arms and support to Israel. Vanguard invested in Israeli defence contractorElbit Systems and purchased $546 million worth of Israeli government bonds.[55][56][57]
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