The Vanguard Group

The Vanguard Group, “Vangard Group” is a private investment fund management company; along with BlackRock and State Street, it is the “big three” US investment companies. Headquarters located in Valley Forge (suburb of Philadelphia , Pennsylvania ). Founded in 1975 by John Bogle. The company comprises 431 funds, of which 204 are in the United States and 227 foreign funds, and is owned by investors of these funds. The total number of investors as of January 2023 was more than 30 million. The company manages individual retirement accounts, educational savings accounts, various types of financial annuities and provides consulting services to its clients. The size of assets under management as of March 2022 was $8.1 trillion.

Vanguard Group is one of the largest shareholders of the largest US banks: Bank of America, JPMorganChase, Citigroup, Goldman Sachs, Morgan Stanley, which ensures hyperconcentration of capital. Because of this, the company is called “investment Leviathan”.

In addition to banks, Vanguard Group participates in the management of such global giants as Apple, Microsoft, ExxonMobil, Johnson & Johnson, Amazon, Meta Platforms, General Electric, Berkshire Hathaway, AT&T, Alphabet.

The first Vanguard fund was founded in 1929 under the name Industrial and Power Securities Company. The group itself began work in 1975. Its founder, John Bogle, was previously chairman of the investment fund management company Wellington Management Company LLP, but was fired for a failed merger. He then founded his own group of mutual funds, named after Admiral Nelson's flagship, HMS Vanguard.

According to the principles formulated by him in his diploma work “The Economic Role of an Investment Company.” The main idea of ​​this work is that there is no need to have a large number of analysts in the fund deciding whether to buy shares of a particular company; the same profitability can be obtained simply by investing in the 500 largest companies.

In 1975, Bogle put his ideas into practice by creating the first index fund , the Vanguard 500 Index Fund, based on the S&P 500 index and a corresponding exchange-traded security. Since 1981, the company's assets under management have doubled almost every three years. In 1981 they amounted to $3 billion, 1983 — $6 billion, 1985 — $12 billion, 1987 — $24 billion, 1990 — $50 billion, etc. From 1996 to 2005, assets under management increased from 200 billion to $800 billion.

In 1984, PRIMECAP Management Company, a fund management company founded a year earlier, became part of Vanguard . In 1989, John Brennan became the head of Vanguard.

In 1995, a group of four Vanguard Horizon Funds was created, including the Capital Opportunity Fund, which were focused on riskier investments than other Vanguard funds.

The Vanguard 500 Index Fund soon became the largest mutual fund in the world. Vanguard index funds outperformed their actively managed peers by 99% in long-term bonds, 96% in intermediate-term bonds, and 92% in short-term bonds from 1998 to 2008. The famous American investor Warren Buffett calls long-term investments in index funds one of the best investment strategies.

In 1996, The Vanguard Group opened its first office outside the United States in Melbourne, Australia. That same year, John Bogle left his position as chief executive officer (CEO) of the company. From 1996 to 2008, this position was held by Brennan, John Jack, and on August 31, 2008, F. William McNabb III became the company's chief executive officer; since 2010, he has headed the board of directors of The Vanguard Group.

In 2014, the company's assets reached $3 trillion for the first time, and in 2018 they exceeded $5 trillion.

Owners and management

The Vanguard Group is owned, according to official data, by 58 shareholders, of which 23 are the company's management, and the rest are investment funds managed by the company and partners (other companies). More than 70 percent of the shares belong to the company's management.

Mortimer J. Buckley (b . 1969) has been Chairman of the Board of Directors and Chief Executive Officer since 2018, with the company since 1991.

Activities

The Vanguard Group offers individual investors opportunities to invest in the company's mutual funds, exchange-traded funds, personal trust services, as well as investing in stocks, bonds and third-party funds. Provides financial planning advice and manages retirement and education savings accounts. The company also offers a range of services for institutional clients.

In 2022, The Vanguard Group managed assets for 217 “investment companies”—US, Canadian, European (UCITS) and offshore (Cayman Islands) mutual funds totaling $7.795 trillion. Asset management included the so-called “sub-advisory services” service, that is, when a mutual fund owns assets not directly, but through an intermediary (it is a sub-manager).

The market value of shares held by The Vanguard Group listed on the NASDAQ and NYSE stock exchanges at the end of 2022 was $3.93 trillion. These are stakes in 4582 companies. The largest stakes by value were Apple ($196 billion), Microsoft ($168 billion), Alphabet ($87 billion), Amazon ($70 billion), Nvidia ($45 billion), Tesla ($44 billion), ExxonMobil ($43 billion), Berkshire Hathaway ($43 billion), UnitedHealth Group ($41 billion), Johnson & Johnson ($39 billion), JPMorganChase ($39 billion), Visa ($33 billion), Meta Platforms ($31 billion), Procter & Gamble ($31 billion), Home Depot ( $31 billion), Mastercard ($29 billion), Chevron ($26 billion), Merck & Co ($24 billion), Eli Lilly and Company ($24 billion), AbbVie ($24 billion), Broadcom ($23 billion), PepsiCo ($23 billion) , The Coca Cola Company ($22 billion), Pfizer ($22 billion), Bank of America ($21 billion).

The company's largest investment funds for 2022:

• Vanguard Total Stock Market Index Fund ($1.21 trillion)
• Vanguard 500 Index Fund ($766 billion)
• Vanguard Total Intl Stock Idx Fund ($369 billion)
• Vanguard Total Bond Market Index Fund ($287 billion)
• Vanguard Institutional Index Fund ($261 billion)
• Vanguard Total Bond Market II Index Fund ($236 billion)
• Vanguard Federal Money Market Fund ($211 billion)
• Vanguard Developed Markets Index Fund ($154 billion)
• Vanguard Value Index Fund ($151 billion)
• Vanguard Growth Index Fund ($146 billion)
• Vanguard Mid Cap Index Fund ($145 billion)
• Vanguard Small Cap Index Fund ($120 billion)
• Vanguard Wellington Fund ($111 billion)
• Vanguard Emerging Markets Stock Index Fund ($102 billion)