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The Vanguard Group

American investment advisor

The Vanguard Group, Inc., commonly known as Vanguard, is a leading American investment advisor based in Malvern, Pennsylvania. It is the largest provider of mutual funds and the second-largest provider of exchange-traded funds globally. Founded by John C. Bogle, Vanguard is known for its low-cost investing approach and is owned by its customers.

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Timeline

Introduction of Wellington Fund

In 1929, Vanguard introduced its first mutual fund, Wellington Fund, which invested in stocks and high-quality bonds with an emphasis on conservatism during a period of market speculation.

Formation of Vanguard Group

John C. Bogle conducted a study for his undergraduate thesis at Princeton University, where he found that most mutual funds did not earn more money compared to broad stock market indexes. This led to the formation of Vanguard.

Merger with fund management group

John C. Bogle forged a merger with a fund management group based in Boston, becoming president in 1967 and CEO in 1970. However, the merger ended badly and Bogle was fired in 1974.

The Vanguard Group Founded

The Vanguard Group was founded in Malvern, PA on September 24, 1974 by John Bogle.

Establishment of Vanguard Group

In 1975, following a corporate struggle at Wellington Management Company, John Bogle founded Vanguard to handle administrative and legal services for the mutual funds. The firm started with eleven funds, 28 employees, and 372,648 investor accounts.

Jack Bogle's Speech on Strategy and Structure

Jack Bogle, the founder of Vanguard, emphasized the importance of structure in shaping strategy. He highlighted how Vanguard's structure, where the funds own the company, has been a driving force behind their client-centric approach.

Transition to No-Load Fund Distribution

In 1977, Vanguard abandoned broker distribution and shifted to no-load fund distribution, making it more accessible to investors.

Client-Centric Decision Making at Vanguard

Vanguard's commitment to making decisions in the best interest of their client-owners has been a core principle since 1981. The unique ownership structure of the company, where investors own Vanguard through the funds, has been pivotal in shaping this approach.

Vanguard offers brokerage services

Vanguard introduced a brokerage service to allow clients to invest in individual stocks and bonds alongside mutual funds, offering significant savings on stock trading commissions.

Launch of Vanguard Primecap fund

In November 1984, Vanguard collaborated with Primecap to launch the Vanguard Primecap fund, marking a significant development in the indexing model.

Vanguard closes two top-performing funds

Vanguard suspended new share offerings for the Windsor and Explorer Funds to protect existing investors and maintain competitive long-term results. This decision reflected Vanguard's commitment to prioritizing investor interests.

Launch of Vanguard Total Bond Fund

In December 1986, Vanguard introduced the Total Bond Fund, the first bond index fund available to individual investors, expanding their range of investment options.

Launch of Vanguard Extended Market Index Fund

In December 1987, Vanguard launched the Vanguard Extended Market Index Fund, which included the entire stock market except for the S&P 500, diversifying their index fund offerings.

Vanguard Small-Cap Index Fund

In 1989, Vanguard launched the Vanguard Small-Cap Index Fund, derived from an earlier fund, to provide investors with exposure to small-cap stocks in the U.S. market.

Vanguard Pacific and European Index Funds

Vanguard introduced the Vanguard Pacific and European Index Funds in 1990, offering investors low-cost access to the stock markets of the Pacific region and Europe.

Vanguard breaks ground on new corporate headquarters

In 1992, Vanguard initiated the construction of its new corporate headquarters in Chester County, Pennsylvania, to centralize its operations and support future expansion.

Retirement of John Neff

In 1995, John Neff retired as the manager of Vanguard's Windsor Fund after a successful 30-year career, outperforming the S&P 500 index by an average of 300 basis points per year.

John J. Brennan becomes CEO of Vanguard

In 1996, John J. Brennan took over as the CEO of Vanguard, continuing the legacy of leadership and financial stewardship within the company.

Introduction of transaction capabilities on Vanguard Online

In 1997, Vanguard Online introduced new features that allowed clients to monitor their account balances and conduct transactions on their fund holdings, marking a significant advancement in online financial services.

John J. Brennan succeeds Bogle as Vanguard chairman

In 1999, John J. Brennan took over as chairman of Vanguard after Bogle retired due to reaching the company's mandatory retirement age of 70.

Introduction of Vanguard Calvert Social Index Fund

Vanguard introduced Vanguard Calvert Social Index Fund (now Vanguard FTSE Social Index Fund) to cater to investors who want their portfolios to align with their values by tracking the performance of U.S. stocks based on environmental, social, and governance criteria.

Entry into the ETF Market

Vanguard revolutionized the ETF market by offering exchange-traded shares of Vanguard index funds, starting with the Vanguard Total Stock Market ETF. This innovative approach significantly reduced costs for investors seeking diversified investment options.

Launch of Vanguard Target Retirement Fund suite

In 2003, Vanguard introduced its target-date funds, the Vanguard Target Retirement Fund suite, providing investors with diversified investment options for retirement planning.

Are Vanguard’s ETFs Cannibalizing the Firm’s Index Funds?

A study published in The Journal of Index Investing in Summer 2010 explores whether Vanguard's ETFs are negatively impacting the performance of the firm's index funds.

GMO versus Vanguard: Assessing the Performance of Comparable Funds

A comparison of the performance of funds from GMO and Vanguard was made on October 1, 2010, to evaluate their relative performance.

Vanguard Lowers the Cost of Investing

Vanguard once again reduces the cost of investing, making it more accessible to investors.

Vanguard Launches Canadian Investment Business

Vanguard expands its operations by launching a Canadian investment business.

Vanguard's Benchmark Changes

In 2012, Vanguard made significant benchmark changes by transitioning several international and U.S. stock index funds to new benchmarks. These benchmarks were developed by FTSE Russell and the University of Chicago's CRSP, aiming to lower licensing costs, ensure high standards, and provide cost certainty for the funds in the future.

Vanguard switches index providers

In October 2013, Vanguard announced a change in index providers for many of its US and international index funds, moving from MSCI benchmarks to CRSP and FTSE indexes to reduce costs.

Vanguard's Asset Accumulation

In 2014, Vanguard's strong asset accumulation led to global assets under management reaching 3.1 trillion dollars. This growth positioned Vanguard as the second largest provider of exchange-traded funds, the largest provider of defined contribution plans in the U.S., and the largest provider of target date retirement funds.

Launch of Vanguard Personal Advisor Services

In 2015, Vanguard introduced Personal Advisor Services, offering a combination of ongoing advisory services, online tools, and advanced investment modeling technology. This service made personalized advice more accessible and affordable to individual investors with a minimum of $50,000 in Vanguard investments.

Discontinuation of VanguardAdvantage Accounts

Vanguard announced the discontinuation of their VanguardAdvantage Accounts on the Bogleheads forum.

Vanguard ends small cash-management service

Vanguard decided to discontinue its small cash-management service.

Vanguard Versus Fidelity: Multidimensional Comparison of the Index Funds and ETFs

An analysis comparing the index funds and ETFs of Vanguard and Fidelity, the two largest mutual fund families, was conducted on April 5, 2019.

Transition of Vanguard Variable Annuity Services to Transamerica

In June 19, 2019, Vanguard announced plans to shift the client service and account administration for the Vanguard Variable Annuity to Transamerica. Additionally, Vanguard discontinued the Vanguard Annuity Access® online platform.

Discontinuation of VanguardAdvantage Cash Management Program

On July 31, 2019, Vanguard ceased its VanguardAdvantage cash management program due to low usage. Less than 2% of eligible clients were utilizing the service, with only half being active users.

Vanguard returns assets in China and faces criticism

In October 2020, Vanguard returned about $21 billion in managed assets to government clients in China and faced criticism for its investments in Chinese companies.

Vanguard launches fractional share program for ETFs

In February 2021, Vanguard introduced a fractional share program for its exchange-traded funds, allowing investors to invest for as little as $1.

Vanguard joins asset managers for net-zero emissions goal

In March 2021, Vanguard joined other asset managers in aiming for net-zero emissions by 2060, aligning with the Paris Agreement goals and focusing on environmental sustainability.

Vanguard launches superannuation fund in Australia

In November 2022, Vanguard expanded its services by launching a superannuation fund in Australia under the name Vanguard Super.

Founder Ends Role as Chief at Vanguard

The founder of Vanguard is stepping down from his role as chief at the company.

End of the Timeline
The Vanguard Group

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