Vanguard

Wellington Fund, the oldest of Vanguard’s funds, was launched on July 1, 1929, by Walter L. Morgan; it is also the oldest balanced fund in the United States, and its manager was the Philadelphia-based Wellington Management Company.⁠[1][2][2]

John Clifton Bogle graduated magna cum laude in economics from Princeton UniversityPrinceton UniversityPrinceton University is a private university and Ivy League member in Princeton, New Jersey. Chartered on October 22, 1746 as the College of New Jersey, it moved to Princeton in 1756 and adopted its present name in 1896. Undergraduate education leads to A.B. and B.S.E. degrees and emphasizes small-group discussion, independent research and residential college life. Graduate education spans the humanities, social sciences, natural sciences and engineering. As of October 2026, Christopher L. Eisgruber was president. Its 2026–27 operating budget was $3.407 billion, including $342 million for undergraduate aid.Open the full entry; his senior thesis on mutual funds caught Morgan’s attention, and in 1951, at age 22, he was hired by Wellington Management Company. He became assistant to the president in 1955, administrative vice president in 1962, executive vice president in 1965 and president in 1967; in the late 1950s he persuaded Morgan to start an equity fund to complement Wellington Fund, and the value-oriented equity fund Windsor Fund debuted in 1958.⁠[2][2][2][2][2]

In 1967, Bogle led the merger of Wellington Management Company with the Boston investment firm Thorndike, Doran, Paine & Lewis (TDPL). Looking back, he later called it one of the most foolish mergers in the history of corporate America and acknowledged that he was mainly responsible for it; after the merger Wellington’s new funds performed very badly, with Ivest Fund falling 65% from its high, and Wellington Fund’s performance over 1966–1976 ranked last among balanced funds in the country.⁠[2][3][3][3][3]

During the 1973–1974 bear market, the money managers who had come into Wellington through the merger lost trust in Bogle and blamed him for the funds’ poor performance; on January 23, 1974, those partners banded together and removed him.⁠[3][3]

A management dispute with the TDPL side led Bogle to form Vanguard in September 1974 to handle the administrative affairs of the Wellington funds, while investment management and distribution remained with Wellington Management. According to Bogle’s September 12, 1974, memorandum to staff, the new organization would provide all administrative, financial and record-keeping services to the funds from September 16; the company was incorporated on September 24, 1974, with initial capital of only $300,000.⁠[2][3][3][3][3]

Bogle named the company after the Vanguard, the flagship of Admiral Horatio Nelson at the Battle of the Nile in 1798, believing the name evoked leadership and progress; the company adopted a nautical theme and called its employees “crew members.” He called the new company “the Vanguard Experiment”: mutual funds would operate at cost and independently, with their own directors, officers and staff, rather than being run for profit by an external management company.⁠[2][2][2]

On May 1, 1975, with the approval of fund shareholders, the funds’ original management contract with Wellington was terminated and new contracts with lower fees took effect, and The Vanguard Group used part of the savings to assume the funds’ operating expenses; Vanguard lists this date as the day it commenced operations. Bogle later argued that the company’s true birthday was its incorporation date, September 24, 1974.⁠[3][3][1][3]

The new company drew almost no notice from the press at its birth, and the attention that followed was unkind: ForbesForbesForbes is an American business media brand that began with Forbes magazine, founded by B.C. Forbes in 1917. It is known for rankings such as the Forbes 400, the World’s Billionaires list and 30 Under 30, and operates Forbes.com, ForbesLive events and licensed editions in 81 countries. Since 2014 a majority stake has been held by the Hong Kong investment group Integrated Whale Media; a 2021 plan to list on the New York Stock Exchange through a special purpose acquisition company was terminated in 2022. It is headquartered in Jersey City, New Jersey.Open the full entry published “A Plague on Both Your Houses?” in May 1975. Decades later, Forbes editor William Baldwin apologized twice for the article, once on February 8, 1999, and again on August 26, 2010.⁠[3][3][3][3][3]

On September 18, 1975, Bogle presented the Vanguard board with a proposal to create the world’s first index mutual fund, which the board reluctantly approved; First Index Investment Trust (now Vanguard 500 Index Fund) was incorporated on December 31, 1975, to track the S&P 500 Index.⁠[3][3][3][4]

The fund’s initial public offering on August 31, 1976, was a flop: the underwriters raised only about $11 million (Vanguard’s later announcement put the figure at $11.3 million, far short of the $150 million target), not enough to buy round lots of all 500 stocks in the index. Industry insiders ridiculed the approach as “un-American” and a “sure path to mediocrity.” For pioneering index funds for individual investors, Bogle was often called the “father of indexing.”⁠[3][4][5][2]

On February 7, 1977, Vanguard eliminated all sales charges on investor purchases of its funds, stopped selling through brokers and offered its funds directly to investors, becoming a pure no-load fund company; Bogle described it as the first conversion from load funds to no-load funds in industry history. The company went on to set up an in-house fixed income management group in 1981, reducing its reliance on external fund managers, and in 1983 launched low-commission brokerage services that offered savings of up to 70% on stock trading commissions.⁠[3][2][3][5][5]

Over the following decade Vanguard launched a series of new products: STAR Fund, a fund of funds with no extra expenses, on March 29, 1985, and the Institutional Index Fund for large institutions on July 31, 1985; the Total Bond Market Index Fund on December 11, 1986; a total stock market index fund and a balanced index fund in 1992; the Admiral series, with lower expense ratios for individual investors with large balances, on December 14, 1993; and defined-maturity bond index funds and the LifeStrategy series in 1994. When Bogle stepped down as CEO in 1996, the company had 17 index funds.⁠[3][3][3][3][3][3][3][3]

In 1989, Vanguard set up its Institutional Retirement Services Division, entering the workplace investment market with defined contribution retirement plans; the company had offered retirement products since about 1979, and this was its first stand-alone division serving plan sponsors and consultants.⁠[5][5]

In 1992, Bogle received a proposal to launch the first exchange-traded fund (ETF), but he turned it down, believing that letting investors trade the S&P 500 all day in real time ran counter to the interests of index investors; the idea’s inventor, Nathan Most, then took it to State StreetState StreetState Street Corporation is a Boston-based US financial services group serving institutional investors through investment servicing, investment management and market services. Its businesses include custody, fund accounting and administration, investment software and SPDR funds. It trades on the New York Stock Exchange as STT.Open the full entry, which launched the first ETF, “Spiders,” in 1993. Bogle said he had no regrets about the decision.⁠[3][3][3][3]

Vanguard launched its website in 1995, and from 1997 clients could check account balances and transact in their fund holdings online. In 1996, Vanguard Investments Australia opened in Melbourne, the firm’s first international branch; over the next three decades Vanguard expanded into several European countries as well as Canada, India and Mexico. The same year, the company began offering investment advisory and financial planning services at low fees.⁠[5][5][5][5][5]

In January 1996, Bogle passed leadership of the company to his hand-picked successor, John J. Brennan, who had joined in 1982 as Bogle’s assistant and served as CEO from 1996 to 2008. In December 1999, Bogle left the Vanguard board and created the Vanguard-supported Bogle Financial Markets Resource Center, serving as its president and studying issues in financial markets and mutual funds through books, articles and speeches until his death.⁠[2][5][2][2]

In 2001, Vanguard launched exchange-traded funds called “VIPERs” (later renamed Vanguard ETFs), starting with Vanguard Total Stock Market ETF. It designed the ETF as an exchange-traded share class of an existing index fund, using the scale of existing funds to lower costs, and patented the structure.⁠[3][5][5]

Bill McNabb joined Vanguard in June 1986, became CEO in 2008 and added the role of chairman in 2009. After the 2008 financial crisis, Vanguard created its Financial Advisor Services division in 2011 to provide products, services and education to registered independent advisors and broker-dealers; in 2014 the company reached 20 million investors, and in 2015 it launched Personal Advisor Services, which combines a human advisor with online services.⁠[6][6][5][5][5]

On the company’s 40th anniversary, Bogle wrote to staff that Vanguard’s assets had grown from about $10 billion in 1984 to about $3 trillion, a 21% annual growth rate over forty years, and that the “at-cost” mutual ownership structure Vanguard pioneered remained unique. The expense ratio of the Index 500 fund had fallen from 0.43% in 1977 to 0.05% in 2014 for its Admiral shares and ETFs.⁠[3][3][3][3][3]

On July 13, 2017, Vanguard’s board elected chief investment officer Tim Buckley as president and director and announced that he would succeed McNabb as CEO on January 1, 2018, with McNabb remaining chairman; Buckley had joined the company in 1991 as Bogle’s assistant and became its fourth CEO since its founding. Greg Davis, head of the Fixed Income Group, became chief investment officer at the same time.⁠[6][6][6][6][6]

In November 2018, Bogle wrote in The Wall Street Journal that index funds’ share of corporate ownership would keep rising and that if index mutual funds crossed 50%, the three firms Vanguard, State Street and BlackRockBlackRockBlackRock is a publicly traded investment management company headquartered in New York, founded in 1988 by Larry Fink and seven others and listed on the New York Stock Exchange (ticker BLK); its businesses include the iShares family of exchange-traded funds and the Aladdin investment and risk management platform. As of June 30, 2026, its assets under management totaled $15.3 trillion.Open the full entry might own 30% or more of the U.S. stock market, giving them effective voting control, a concentration he said would not serve the national interest. He proposed that index funds promptly and fully disclose their voting policies and each engagement with corporate managers, and that the voting power of shares held by index managers be limited.⁠[7][7][7][7]

Harvard Law School professor John Coates argued that indexing had produced social benefits in the form of lower expenses and higher long-term returns, but that concentrated voting power lacked transparency and could create conflicts of interest; Todd Gormley, a professor at Washington University in St. Louis, said there was no convincing evidence that the growth of index funds was having adverse effects.⁠[8][8][8][8]

Bogle died on January 16, 2019, in Bryn Mawr, Pennsylvania, at age 89. Then-CEO Buckley said Bogle’s ideas had completely changed the way people invest. Vanguard then managed $4.9 trillion in assets, more than 70% of it in index funds.⁠[2][2][2]

On December 11, 2020, Vanguard announced that it was lowering the minimum initial investment for its Institutional Target Retirement Funds (Institutional TRFs) from $100 million to $5 million. In the following months, many retirement plan investors redeemed the higher-cost Investor Target Retirement Funds (Investor TRFs) and switched to the institutional versions; the investor funds sold appreciated assets to meet the redemptions, leaving retail investors who stayed in taxable accounts with unusually large capital gains distributions and tax bills. The episode later led to regulatory investigations (see January 17, 2025).⁠[9][9][9][9]

The same year, Vanguard made its first investment in Altruist, a custody and wealth technology platform for financial advisors, to bring more competition to registered investment advisor custody.⁠[10]

In 2021, Vanguard opened a new high-efficiency trading floor and adopted advanced artificial intelligence trading technology, later introducing its Personalized Indexing service and the Vanilla estate planning platform.⁠[5][5][5]

In December 2022, Vanguard withdrew from the Net Zero Asset Managers initiative, which aims for net zero emissions across investment portfolios by 2050. The company said such industry initiatives can sometimes cause confusion about the views of individual investment firms, particularly over whether net zero approaches apply to the broadly diversified index funds favored by its investors, but that leaving would not affect its commitment to helping investors navigate climate risks.⁠[11][11][11][11][11]

Climate groups criticized the decision as bowing to right-wing pressure, with Roberta Giordano of the Sunrise Project calling it short-sighted; former Vice President Al Gore called the move “irresponsible.” Groups including Philadelphia’s Earth Quaker Action Team demonstrated outside Vanguard’s headquarters.⁠[11][11][11][11]

Vanguard’s patent on the structure that lets the same portfolio be offered as both a mutual fund and an ETF expired in 2023. Industry participants believe the structure can reduce taxable events in a shared portfolio and that competitors may use it to launch similar products, subject to approval by the Securities and Exchange Commission.⁠[12][12][12][12]

On February 1, 2023, Vanguard launched a proxy voting choice pilot in three equity index funds, letting investors choose among several voting policies that determine how the funds vote at portfolio companies’ shareholder meetings. The program, later renamed Investor Choice, covered 12 equity index funds with more than $1 trillion in assets by September 2025, and more than 82,000 investors took part in the 2025 proxy season.⁠[13][13][14][14]

In November 2023, people familiar with the matter said Vanguard had signed severance agreements with the roughly 10 remaining staff in its Shanghai office, which would close early the following year; a month earlier, the company had sold its 49% stake in a robo-advisory joint venture with Ant Group.⁠[15][15][15][15]

After the Securities and Exchange Commission approved spot bitcoin ETFs in January 2024, Vanguard said its platform would not offer purchases of these products and that it had no plans to launch bitcoin ETFs or other crypto-related products, saying they did not align with its offer built on equities, bonds and cash as the building blocks of long-term portfolios. Some investors said on X that they would move their accounts out of Vanguard.⁠[16][16][16][16]

On February 29, 2024, Buckley announced that he would retire by year-end, and chief investment officer Greg Davis was also named president; Vanguard then managed $8.7 trillion in assets and was the second-largest U.S. ETF issuer, behind BlackRock.⁠[17][17][17][17]

On May 14, 2024, the board appointed Salim Ramji as CEO and a director. Ramji had spent a decade at BlackRock, most recently as Global Head of iShares & Index Investing, and before that was a senior partner at McKinsey & Company. He took office on July 8, when Davis joined the board and lead independent director Mark Loughridge became nonexecutive chairman.⁠[18][18][18][19]

In late 2024, a coalition of Republican-led states led by Texas Attorney General Ken Paxton sued BlackRock, State Street and Vanguard, alleging that the three asset managers had bought substantial stakes in publicly traded coal companies and conspired to get those companies to restrict output, “artificially constricting” the coal market in violation of antitrust laws and through deceptive marketing; the three firms jointly moved to dismiss the case in March 2025, and the motion was denied in August.⁠[20][21][21]

On February 26, 2026, Vanguard settled with Texas and 10 other states without admitting any wrongdoing, agreeing to pay the states $29.5 million, expand its Investor Choice program, keep its U.S. businesses from joining groups with climate-focused investment or stewardship objectives, and remain “passive” in its U.S. equity investing: it will not direct or attempt to direct portfolio companies’ business strategies, will not nominate directors or make shareholder proposals, and will not threaten to sell shares as leverage. Vanguard said the settlement terms reaffirmed its longstanding practices and the passive nature of its index funds.⁠[21][21][21][22][20][20][21]

The settlement requires Vanguard to use commercially reasonable efforts to expand Investor Choice by the end of June 2027 to every fund with more than half of its assets in U.S. equities, and to keep offering it until at least the end of June 2032. Alabama Attorney General Steve Marshall said the settlement showed that subordinating investor returns to political objectives would carry legal consequences; a State Street spokesperson said the lawsuit was “baseless” and denied any collusion aimed at coal prices.⁠[21][21][20][21][21]

On January 17, 2025, the Securities and Exchange Commission announced that Vanguard would pay $106.41 million to settle charges over misleading statements about capital gains distributions and tax consequences for its Investor Target Retirement Funds. The SEC’s order found that the funds’ 2020 and 2021 prospectuses failed to disclose that redemptions by newly eligible investors switching to the institutional funds could increase capital gains distributions, and that the company had not adopted reasonable written policies and procedures.⁠[9][9][9][9]

Without admitting or denying the SEC’s findings, Vanguard agreed to be censured and to cease and desist; the total consisted of a $13.5 million civil penalty and $92.91 million in relief under state settlements, to be distributed to harmed investors through a Fair Fund. The New York Attorney General’s office, the Connecticut Department of Banking and the New Jersey Attorney General’s office announced settlements of parallel investigations the same day; separately, Vanguard agreed to pay $40 million to settle an investor class action.⁠[9][9][9][9][9]

Effective February 1, 2025, Vanguard cut expense ratios by one to six basis points across 87 funds, covering bond funds, ETFs, U.S. and international equity funds and money market funds, and expected the cuts to save investors more than $350 million that year, calling it the largest annual expense ratio reduction in its nearly 50-year history. It had about $10.4 trillion in assets under management as of November 30, 2024, and said it had lowered investing costs more than 2,000 times since its founding.⁠[23][23][23][23][23]

In December 2025, Vanguard reversed a longstanding position and announced that from December 2 it would allow ETFs and mutual funds that primarily hold crypto assets such as bitcoin, ether, XRP and Solana to trade on its platform.⁠[24][24]

On January 12, 2026, Vanguard said it had completed a multiyear effort to establish two wholly owned U.S. investment advisors, Vanguard Capital Management and Vanguard Portfolio Management, each with its own investment management and investment stewardship teams; the company said it expected no impact on fund expense ratios or performance and that the change would help diversify perspectives in the proxy voting ecosystem.⁠[25][25][25][25]

On July 1, 2026, the U.S. Treasury Department selected Vanguard Total Stock Market ETF (VTI) as an alternate investment option for Trump Accounts (530A accounts), a new type of account for families to save and invest for their children; Vanguard said it intended to support rollovers into such accounts once it received guidance from Treasury.⁠[26][26][26]

On July 24, 2026, Vanguard announced that nonexecutive chairman Mark Loughridge would retire on December 31, 2026, to be succeeded as nonexecutive chairman by Kenneth Jacobs, who joined the board in February 2026 and was chairman and CEO of Lazard from 2009 to 2023, with John Murphy, president and chief financial officer of The Coca-Cola Company, becoming lead independent director.⁠[27][27][27][27][27]

On August 26, 2026, Vanguard and Altruist announced a definitive agreement under which Vanguard will acquire Altruist, an AI-forward wealth technology and custody platform serving financial advisors. After closing, Altruist is to operate as a standalone business, keeping its leadership, brand and operating model; terms were not disclosed, and the deal was expected to close later in the year, subject to regulatory approvals and other conditions.⁠[10][10][10][10]

In the 2026 proxy season, the number of investors participating in Investor Choice rose from 82,000 in 2025 to 507,000, and participating assets rose from $9 billion to $151 billion; the program covers about $4 trillion in assets, and the company plans to extend it to all U.S. equity index funds in 2027.⁠[28][28][28][28]

Vanguard is owned by its funds, which are in turn owned by the funds’ shareholders, and its stated purpose is to take a stand for all investors, treat them fairly and give them the best chance for investment success. As of June 30, 2026, it offered 487 funds worldwide, 241 in the U.S. and 246 outside the U.S.; as of December 31, 2025, it had more than 50 million investors and about 20,000 employees, and the asset-weighted average expense ratio of its U.S. mutual funds and ETFs was 0.07%.⁠[1][1][1][1][1][1]

As of October 2026, Salim Ramji is CEO and a director, and Greg Davis is president, chief investment officer and a director, responsible for investment management and enterprise risk management.⁠[29][29]

Vanguard: Official website: https://vanguard.com/ (opens in a new window).⁠[30]

X: Public account: https://x.com/Vanguard_Group (opens in a new window)⁠[30]