Behind the Money
Vanguard: can it keep playing disruptor?
Feb 26, 2025
Brooke Masters, US managing editor of the Financial Times, dives into Vanguard's evolution under a new CEO. The discussion reveals how Vanguard’s commitment to low-cost investing, championed by founder Jack Bogle, remains influential. Masters analyzes the firm’s ambitions to expand into new financial services while grappling with the impact of technology and market shifts. The conversation highlights Vanguard's innovative strategies, competitive pricing, and the delicate balance between tradition and modernization as it aims to redefine its role in wealth management.
22:53
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Quick takeaways
- Vanguard's commitment to low-cost investing, rooted in Jack Bogle’s philosophy, fundamentally changed the investment landscape, forcing competitors to lower fees.
- Under new CEO Saleem Ramji, Vanguard plans to leverage AI and technology to expand into active fixed income and financial advice, targeting younger investors.
Deep dives
The Impact of Jack Bogle on Vanguard's Philosophy
Jack Bogle, the founder of Vanguard, believed in making investing accessible and affordable for small investors. He championed a strategy focused on low-cost investments, significantly deviating from the prevalent active management approach that involved high fees for stock-picking experts. Bogle introduced index investing, which mirrors stock indices like the S&P 500, allowing investors to benefit from market growth while keeping costs down. This philosophy instigated a shift in the investment industry, forcing competitors to reduce fees and offering investors a more financially beneficial alternative.
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