Australian Investors Podcast Vanguard & passive investing [4/10]
Jan 9, 2026
Discover how Vanguard revolutionized investing by introducing index funds and the importance of low-cost investing. Learn about the remarkable growth of ETFs and how market-cap indexing functions. Explore the reasons behind the outperformance of passive funds compared to active ones. Delve into the client-owned model of Vanguard that keeps fees low and encourages transparency. Gain insights into the criticisms of market-cap indexes while uncovering popular Australian ETFs to watch.
AI Snips
Chapters
Transcript
Episode notes
Vanguard's Founder Chose A Client-Owned Model
- Jack Bogle built Vanguard as a member-owned, low-profit organization that prioritized investors over owner profit.
- Owen Rask notes Bogle could have become extremely wealthy but chose Vanguard's client-owned model instead.
Low Fees Fuel Better After-Fee Returns
- Vanguard proved that matching the market and charging very low fees increases investors' after-fee returns.
- Low fees attract more capital and create a virtuous cycle of scale and fee reductions.
Prioritise Fees When Choosing Funds
- Consider fund fees as a top-five selection criterion because fees strongly predict investor returns.
- Use Morningstar-style fee awareness to improve your long-term portfolio performance.