Our history
Serving investors for nearly five decades
Vanguard traces its roots to its first mutual fund, Wellington Fund, introduced in 1929. The fledging fund invested in stocks and high-quality bonds, emphasizing conservatism in an era of rampant market speculation.
Even though it was created just before the worst years in U.S. financial market history, the fund not only survived but thrived. Today, Vanguard Wellington Fund is the industry’s oldest balanced fund and one of its largest.
Nearly a half century after the fund was introduced, a novel start-up named Vanguard adopted the investment philosophy of this pioneering fund: balance, diversification, discipline, and a long-term perspective. With a sound and sensible investment approach as a foundation, Vanguard began its march to industry leadership with a series of audacious strokes—introducing the first index mutual fund, adopting a commission-free distribution system, and internalizing fixed income management. The following timeline recounts the initiatives and innovations that propelled Vanguard to its position as one of the world’s leading asset management organizations.
A new and better way to manage a mutual fund company
1975: Vanguard commences operations under a unique investor-owned structure
When founding Vanguard, John C. Bogle sought to create a new and better way to manage a mutual fund company. The result was an enterprise based on a simple but revolutionary idea: investor ownership. Vanguard is owned by the funds that, in turn, are owned by the funds’ shareholders. In short, it’s a company owned by the investor and for the investor.
Vanguard founder John C. Bogle discusses what has made Vanguard different from the very beginning
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What made Vanguard different from everybody else in this industry was the structure that I picked in the first place, way back in 1974.
There's an old saying, “Treat your customer like an owner,” which is easy for us to do, because our clients are our owners. The Vanguard shareholders actually own Vanguard.
We offer you a company that has a good sense of values, places a high degree of importance on integrity, and believes the key to success in this business is service to others.
People are the key to everything we do and everything we ever have done. I've often talked about human beings being the hallmark of this operation; people that care about our values, people that care about our integrity. Each with their own hopes and fears and financial goals.
Welcome to Vanguard.
1975: Vanguard introduces its first money market fund
Vanguard opened a new asset class to investors with its first money market fund, affording them the opportunity to earn higher yields than bank savings vehicles provided and to park money in a convenient cash management account. By 1981, money market fund assets represented 36% of Vanguard’s total assets under management, and Vanguard Prime Money Market Fund (now Vanguard Cash Reserves Federal Money Market Fund) was the category’s largest fund, with $1.2 billion in assets.
1976: Vanguard democratizes the institutional strategy of indexing
Vanguard pioneered the concept of mutual fund indexing with the introduction of the First Index Investment Trust (now Vanguard 500 Index Fund). The index strategy, previously available only to pension funds and other institutional investors, brought low costs and broad diversification to individual investors.
1977: Vanguard lowers the cost of investing by going no-load
Vanguard was the first fund group of its size to convert to no-load distribution, meaning that there would be no sales charges on purchases of Vanguard funds. By bypassing the traditional broker-dealer network, Vanguard considerably lowered the cost of investing.
1977: Vanguard supplements bond offerings with municipal funds
A new series of municipal bond funds offered investors three portfolios with different target maturities: short-term, intermediate-term, and long-term. The three-tiered series represented an industry first and provided tax-conscious investors the opportunity to assemble a diversified, laddered portfolio.
1981: Vanguard develops in-house active investment management function
Having previously relied only on external advisory firms to manage active fund assets, Vanguard developed internal investment management capabilities by creating the Fixed Income Group (FIG) to oversee money market and municipal bond products. In-house equity and bond investment professionals are now responsible for $4 of every $5 invested in the Vanguard funds (source: Vanguard).
1981: Vanguard focuses on serving retirement-minded investors
Vanguard Fiduciary Trust Company was founded, enabling Vanguard to serve as trustee and custodian for individual retirement accounts (IRAs). Along with IRAs, the advent of 401(k) plans during this period benefited investors of modest means and helped them save for retirement.
1983: Vanguard offers brokerage services
To enable clients to complement their mutual fund holdings with individual stocks and bonds, Vanguard introduced a brokerage service that offered savings of up to 70% on stock trading commissions.
1985: Vanguard puts investors first by closing two top-performing funds
Prompted by strong cash flow into the Windsor and Explorer Funds, Vanguard suspended the offering of shares to new investors and limited sales to existing shareholders. The firm sought to safeguard investor interests by curtailing the funds’ asset growth, thereby helping to preserve the investment advisors’ ability to produce competitive long-term results. In subsequent years, Vanguard demonstrated its client-first culture by closing other popular funds.
1986: Vanguard unveils the industry’s first bond index fund
Vanguard augmented its index offerings by introducing a second fund seeking to track an index. Vanguard Total Bond Market Index Fund provided low-cost, diversified exposure to the broad U.S. market of taxable, investment-grade bonds. Over the ensuing six years, the firm introduced a roster of index funds that solidified its position as the industry’s indexing leader: Vanguard Extended Market Index Fund (1987), Vanguard Small-Cap Index Fund (adapted from an earlier fund and launched by Vanguard in 1989), Vanguard Pacific and European Index Funds (1990), Vanguard Total Stock Market Index Fund (1992), Vanguard Balanced Index Fund (1992), and Vanguard Growth and Value Index Funds (1992). As of March 31, 2023, Vanguard manages more than $6 trillion in index assets, including more than $1 trillion in the Total Stock Market Index Fund, the largest mutual fund in the world (source: Morningstar, Inc.).
1992: Vanguard breaks ground on new corporate headquarters
To consolidate its burgeoning operations and accommodate future growth, Vanguard acquired 200 acres in Chester County, Pennsylvania, to build new corporate headquarters. The first building on the Malvern office campus opened a year later. Vanguard later expanded its presence in the U.S. by opening offices in Scottsdale, Arizona; Charlotte, North Carolina; Washington, D.C.; Dallas, Texas; and Oakland, California.
1995: Vanguard introduces a new channel to educate and serve clients
Vanguard’s new America Online (AOL) site, Vanguard Online, emerged as an important channel for client interactions beyond the mail and telephone, as well as an accessible educational resource. A year later, capabilities were added that enabled clients to monitor account balances and, in 1997, transact on their fund holdings.
1995: Vanguard announces leadership transition
Vanguard founder John C. Bogle announced that he was stepping down as CEO at year-end and named John J. Brennan as his hand-picked successor. Mr. Brennan had joined Vanguard in 1982 and held a series of senior leadership positions at the firm, including chief financial officer, executive vice president, and president.
John J. Brennan reflects on how Vanguard’s growth is driven by our mission
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When I look forward from there, or backwards to there, you say what’s arguably most impressive in my view is that the company could have been satisfied, and the company wasn’t satisfied. The company said, there’s more we can do. There’s more investors we can serve. We can be higher-value for those investors. And instead of being complacent, really, we made complacency a very visible threat.
And it’s extraordinary, I think, in many ways to see how the people of the company adopted that point of view and said, let’s go be better, and better tomorrow, and better the next day. And that’s the most exciting part of that inflection point, if you will, back then.
There’s no question that as the company has expanded, the mission has driven all that we do. Nothing happens at Vanguard which isn’t in the investors’ interest. It was never conceived that we’d have a brokerage business when Vanguard was established, but it’s a great complement. It was never conceived we’d have millions of people on our recordkeeping system when Vanguard was first established, but it’s a great part of who Vanguard is today, and the stories go on and on and on.
But when you look at the decisions that get made at Vanguard, they always hew back to the mission of being the best financial provider in the world. And I hope there’s tons more—10 and 20 and 100 years from now—that Vanguard does, but never losing sight of the client’s interests and being the best in every endeavor that we undertake.
1996: Vanguard expands internationally by opening an office in Australia
Vanguard Investments Australia opened for business in Melbourne, marking the firm’s first foray outside the United States. Over the next two decades, Vanguard would expand its global footprint to include multiple European countries, Canada, Mexico, and China.
1996: Vanguard rolls out its first advice services
To help individual investors improve their outcomes, Vanguard began offering investment advisory and financial planning services with affordable fee structures that set a new industry standard for value.
2000: Vanguard introduces its first social index fund
Recognizing that some investors want their portfolios to reflect their beliefs and values, Vanguard introduced Vanguard Calvert Social Index Fund (now Vanguard FTSE Social Index Fund), which seeks to track the performance of large- and mid-capitalization U.S. stocks screened for certain environmental, social, and governance (ESG) criteria. Vanguard currently offers both indexed and actively managed ESG options in the U.S., Australia, and Europe.
2000: Vanguard offers cost savings to long-time and loyal clients
Vanguard introduced Admiral™ Shares to reward its largest and longest-term retail shareholders. Recognizing the cost efficiency of large and long-tenured accounts, Admiral Shares featured expense ratios 5 to 7 basis points lower than the already low-cost Investor Shares.
2001: Vanguard brings cost competition to the ETF market
Vanguard began offering ETFs as exchange-traded shares of Vanguard index funds—a unique and patented approach that leveraged the size and scale of existing index funds to bring lower-cost entries to the ETF market. The first one available was Vanguard Total Stock Market ETF, which began trading on the American Stock Exchange.
2002: Vanguard partners with Nevada to offer a 529 plan
For investors seeking a low-cost college savings program, Vanguard partnered with the state of Nevada to develop a 529 College Savings Plan offering 21 investment options, including age-based portfolios. Today, Vanguard is a leading provider of 529 plans available to investors in all 50 states.
2003: Vanguard launches dynamic single-fund portfolios
Vanguard launched Target Retirement Funds, highly diversified, all-in-one portfolios that shift allocations over time by becoming more conservative as the investor’s retirement nears. As of the end of 2021, Vanguard is now the largest target-date fund manager in the industry. Four out of five participants in 401(k) plans recordkept at the firm are invested in a target-date fund (sources: Morningstar and Vanguard).
2006: Vanguard crosses the $1 trillion asset milestone
Buoyed by strengthening financial markets and robust cash flows, Vanguard assets under management surpassed $1 trillion.
2008: Vanguard announces a new CEO
F. William McNabb III was named Vanguard CEO, succeeding John J. Brennan. A 22-year Vanguard veteran, Mr. McNabb previously held senior leadership positions in Vanguard’s Retail and Institutional Investor Groups.
Bill McNabb discusses how taking care of our investors has made Vanguard a stronger company
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First of all, timing is everything, and my predecessor Jack Brennan likes to say I’m the worst market-timer in history. I like to say he’s the best market-timer in history. But in all seriousness, when the [financial] crisis began to really unfold, we had—I was new to the role and the team was—we were still working through that transition. But in a lot of ways, I think it solidified us as a team, because we had to work in a different way than the senior team had ever had to work before.
We were in crisis mode for essentially nine months. And the collaboration and the bonds that were forged during that period are something I’m going to remember for my whole life. And I actually think it led to us being stronger, both as a team, and that eventually translated into us being stronger as a company.
I think anytime you go through a crisis—and 2008 was certainly the most significant crisis we’ve gone through—organizations have an opportunity to rise or fall. And what Vanguard did was step up on behalf of clients. Frankly, we stepped up on behalf of the crew as well, and we emerged from the crisis actually a much stronger company.
One of the things that went on as a result of the crisis is once we had navigated the immediate situation, we actually stepped back and said, with all of the things that we now know, and the then coming regulation, and so forth, how’s the world going to be different? And what do we need to do as an organization to be different?
So in a lot of ways, we were able to take all of the change that was occurring because of the crisis, and actually reshape and refocus our energies, so that we were a stronger company. We’re here to take a stand for investors, treat them fairly, and ensure that they have the best chance for success. I think that’s actually the most succinct way of describing what we are. But if you think about it, our structure really determined an awful lot for us.
And the fact that the funds own Vanguard, and the investors in the funds, therefore, through the funds own Vanguard, has driven everything that we’ve done. Jack Bogle once gave a famous speech where he said strategy follows structure. I actually think that’s correct.
We’re owned by the funds, and therefore, the investors in the funds own Vanguard. We’re the only investment firm in the world that’s structured this way. That client-centricity drives everything. One could argue, everything we’ve done strategically is because of that structure. And if you think about the decisions we make, it’s always what’s in the best interest of our client-owners. And that’s really a result of our structure.
So, when I look back on the last 40 years, every key decision we’ve made has really been centered around the fact that we’re owned by the investors, as opposed to a publicly traded company—the way a publicly traded company is owned, or a private partnership, or whatever.
And that client ownership structure is the single most distinguishing characteristic of Vanguard. You can never take your eye off what’s the heart and soul of this company, which is making sure that we’re there for the investor.
2011: Vanguard forms a division dedicated to serving financial intermediaries
To better serve the growing number of financial advisors and broker-dealers adopting Vanguard ETFs, Vanguard spun off a separate division to provide products, services, and education to more than 1,000 firms. Financial Advisor Services is today the firm’s largest client-serving group measured by assets under management, with nearly $3 trillion in AUM as of February 28, 2023.
2012: Vanguard delivers cost savings and cost certainty with sweeping benchmark changes
Vanguard transitioned six international stock index funds to FTSE Russell benchmarks and 16 U.S. stock and balanced index funds to new benchmarks developed by the University of Chicago’s Center for Research in Security Prices (CRSP). Long-term agreements with FTSE and CRSP secured benchmarks that met Vanguard’s world-class standards, lowered licensing costs for the funds, and provided “cost certainty” into the future.
2015: Vanguard makes advice more accessible and affordable
Vanguard unveiled Personal Advisor Services, which combined an ongoing relationship with a licensed advisor, a user-friendly online experience, and sophisticated investment modeling technology. The service became broadly available to individual investors with at least $50,000 in Vanguard investments to be managed at an asset-based fee of 0.30%.
2015: Vanguard brings to market its first actively managed ETFs
Vanguard launched new factor-based ETFs in the U.K., representing the firm’s first actively managed ETFs and extending its traditionally managed active fund lineup. One year later, Vanguard brought its factor ETFs to Canada, and, in 2018, it introduced them in the U.S.
2018: Vanguard drives down the cost of ETF investing
Long known for its low-expense ETFs, Vanguard further lowered the cost of investing by providing Vanguard Brokerage Services clients with commission-free trading for the vast majority of our ETFs.1 The elimination of commissions resulted in considerable savings for clients and was widely hailed as another investor-friendly initiative. The firm extended commission-free online trading to stocks and options two years later.2
2018: Vanguard welcomes a new leader
Mortimer J. (Tim) Buckley assumed the CEO position, succeeding Bill McNabb. Mr. Buckley joined Vanguard in 1991 and held a number of senior leadership positions, including chief information officer (2001‒2006), head of the Retail Investor Group (2006‒2012), and chief investment officer (2012‒2018).
Tim Buckley shares lessons learned from his predecessors and his vision for Vanguard’s future
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As we enter 2018, I’m absolutely thrilled to take the helm of Vanguard. I get the chance to lead and support a crew I care deeply about, on a mission I firmly believe in. And I’m lucky. I’m surrounded by a top-notch senior leadership team. And I’ve been fortunate through the years to have been mentored by some fabulous leaders.
I’ve had the chance to work with our three legendary CEOs. And people always ask me, what did you learn from them? From Jack Bogle, I learned our founding principles. From Jack Brennan, I learned the importance of strategic differentiation, and that we can all inspire each other to hit levels we never thought possible. Bill McNabb, what we all learned from him, the importance of collaboration. And he showed us how to build highly effective teams.
We’ll continue to follow those principles, to operate that way as we go into the future. And I’m proud to be part of the Vanguard crew, to be part of that team. When I look out, I see 17,000 crew putting the client first, each and every day. And you do so on a noble mission. Every day, we look to help people retire better, put their kids through college. We look to give them financial peace of mind. We have a bright, bright future ahead, and we have a lot more to do for our clients.
2018: Vanguard reaches the $5 trillion asset mark
A long bull market and continued client loyalty propelled Vanguard’s assets past $5 trillion.
2020: Vanguard inaugurates Digital Advisor
Vanguard broadened its advice offerings for individual investors by unveiling an all-digital financial planning and money management service. Digital Advisor delivers unmatched convenience, simplicity, affordability, and functionality to investors seeking a personalized investment plan and ongoing guidance.
2020: Vanguard reimagines the 401(k) business
Vanguard engaged Infosys as part of its ongoing strategy to enhance and continually improve its full-service defined contribution business. The relationship combined a cloud-based recordkeeping platform with Vanguard’s investment and advice capabilities to fundamentally reshape the corporate retirement plan experience for plan sponsors and participants.
2021: Vanguard’s first-ever acquisition of Just Invest
The acquisition adds direct indexing, or personalized indexing, capabilities to bolster Vanguard’s world-class investment product lineup and service offering for advisors.
2022: Extending our investment philosophy to the world
Today, Vanguard continues to expand, bringing the benefits of Vanguard investments and advice to new markets while staying true to our core purpose by giving investors around the world the best chance for investment success.
2022: Formalizing our commitment to DEI
Vanguard became a founding member of the World Economic Forum's Global Parity Alliance, a cross-industry group of companies committed to advancing DEI in the workplace and beyond.
2024: Salim Ramji named Vanguard's CEO
Salim Ramji assumed the role of CEO, succeeding Tim Buckley upon his retirement in July 2024. Mr. Ramji had previously spent more than 25 years including senior leadership roles in investments, capital markets, and wealth management.
1 Commission-free trades excluded inverse and leveraged ETFs.
2 Initial investment and trade minimums, management fees and expenses, and other fees may apply. See the Vanguard Brokerage Services commission and fee schedules for full details.
Notes:
For more information about Vanguard funds or Vanguard ETFs, obtain a prospectus (or summary prospectus, if available) or call 877-662-7447 to request one. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.
Vanguard ETF Shares are not redeemable with the issuing Fund other than in very large aggregations worth millions of dollars. Instead, investors must buy and sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.
All investing is subject to risk, including the possible loss of the money you invest.
Diversification does not ensure a profit or protect against a loss.
Investments in bonds are subject to interest rate, credit, and inflation risk.
Investments in Target Retirement Funds are subject to the risks of their underlying funds. The year in the Fund name refers to the approximate year (the target date) when an investor in the Fund would retire and leave the work force. The Fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. The Income Fund has a fixed investment allocation and is designed for investors who are already retired. An investment in a Target Retirement Fund is not guaranteed at any time, including on or after the target date.
The Factor Funds are subject to investment style risk, which is the chance that returns from the types of stocks in which a Factor Fund invests will trail returns from U.S. stock markets. The Factor Funds are also subject to manager risk, which is the chance that poor security selection will cause a Factor Fund to underperform its relevant benchmark or other funds with a similar investment objective, and sector risk, which is the chance that significant problems will affect a particular sector in which a Factor Fund invests, or that returns from that sector will trail returns from the overall stock market.
Vanguard Personalized Indexing Management, LLC (“Vanguard Personalized Indexing Management”), formerly Just Invest, LLC, an SEC-registered investment advisor, is an independently operated wholly-owned subsidiary of The Vanguard Group, Inc. (“Vanguard”). Vanguard Personalized Indexing is an asset management technology that has been developed and is offered solely by Vanguard Personalized Indexing Management.
For more information on Vanguard Personalized Indexing Management and Vanguard Personalized Indexing, and to access Vanguard Personalized Indexing Management's Form CRS and Form ADV Part 2A disclosure brochure, please visit the Vanguard Personalized Indexing topic page.
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