Vanguard, every mention
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Verbatim, from the transcripts: the passages where Vanguard comes up
Vanguard: The communist capitalist who saved investors a trillion dollars (Audio) · Acquired
- ▶ 3:03:30 Ben Gilbert Vanguard's average ETF and mutual fund expense ratio is now down to 0.07% with some ETFs, like the one that I'm in, the VLO is 0.03%.
- ▶ 3:03:50 Ben Gilbert So that is six and a half times Vanguard's average.
- ▶ 3:03:54 Ben Gilbert So even after all these years and all the Vanguard affecting, there is still quite a bit of difference between Vanguard and the industry average.
- ▶ 3:04:08 Ben Gilbert Passive index fund, because basically everyone has had to meet Vanguard there, but it's interesting how the Vanguard effect has even dragged down the active public managers too.
- ▶ 3:04:17 Ben Gilbert 84% of Vanguard's funds have outperformed their peers over the last 10 years.
- ▶ 3:04:22 Ben Gilbert They have 20,000 employees, they have fifty million investors worldwide, but notably, the last thing I'll say is, a little over 90% of their investors
- ▶ 3:04:33 Ben Gilbert And their investor capital is in the US.
- ▶ 3:04:36 Ben Gilbert So they're not nearly as global as BlackRock or Invesco or Franklin Templeton.
- ▶ 3:07:19 David Rosenthal Still does the investment management for the Wellington fund within Vanguard, even to this day.
- ▶ 3:07:38 Ben Gilbert So it's technically a Vanguard administered fund, but the investment advisory is done by
- ▶ 3:08:04 David Rosenthal It's time to bury the hatchet, and the relationship between Vanguard and Wellington has never been better.
- ▶ 3:08:14 David Rosenthal Vanguard active equity funds and portfolios for them as well.
- ▶ 3:09:42 Ben Gilbert And maybe that's why it works uniquely for Vanguard and for sort of asset management is because the product is capital, you can tap your customers for the thing you would normally tap investors for.
- ▶ 3:09:59 David Rosenthal I mean, even Vanguard's real estate on their campus in Malvern, when they were constructing that, they tapped the shareholders, they tapped the fund holders for essentially construction loans.
- ▶ 3:10:37 Ben Gilbert The other thing, Vanguard was sort of in a unique place to rely on Wellington's active stuff to provide profits during the dark wandering years.
- ▶ 3:10:52 Ben Gilbert And Vanguard figured out a way to bootstrap off of the old business.
- ▶ 3:11:38 David Rosenthal Yes, and even if you get paid a good salary, and Vanguard, you know, pays high salaries commensurate with the industry, you're not getting equity ownership.
- ▶ 3:13:31 Ben Gilbert I did think of one other Jack Bogle-like character who built a Vanguard-like thing, and I'm curious if the thought crossed your mind too.
- ▶ 3:16:04 Ben Gilbert So I think most people coming into this episode know Vanguard has low cost index funds.
- ▶ 3:16:11 Ben Gilbert Some people know that Vanguard is owned by its funds investors, but I think few people realize that is why it is low cost.
- ▶ 3:17:00 Ben Gilbert And Vanguard strategy was just that, to give you the power of compounding returns without, uh, what Jack calls the tyranny of compounding costs.
- ▶ 3:17:31 Ben Gilbert The only reason that they had the market opportunity that they had was because of the corporate structure that they had.
- ▶ 3:18:04 David Rosenthal Also, the flip of that is these large index fund complexes, of which Vanguard is the largest,
- ▶ 3:22:07 Ben Gilbert So why would they compete if, let's say that 20% goes to 50% or 80%,
- ▶ 3:23:30 Ben Gilbert Most of the times it's suggestions of how should we vote the shares, but I get where you're going that the fund manager of, let's say one of these Vanguard or BlackRock grows to be, I don't know, 60% ownership of every company in America.
- ▶ 3:25:31 David Rosenthal And, um, well, Vanguard by its very nature earns no profits.
- ▶ 3:25:50 David Rosenthal Yeah, why is Vanguard the market share leader in mutual funds and index funds?
- ▶ 3:26:17 David Rosenthal And maybe one little twist on this that we can keep in mind as we go is a question I was asking through the research of what's to stop another idealistic young person from coming along and saying, I also don't care about profits, and I am…
- ▶ 3:26:36 Ben Gilbert What protects Vanguard?
- ▶ 3:27:18 Ben Gilbert You, if you're not already big, or you don't go raise a giant amount of money to subsidize it, then you kind of need Vanguard scale economies to compete.
- ▶ 3:28:45 Ben Gilbert There's no chance that I'm going to sell my Vanguard index fund and realize the capital gains tax only to switch to a different index fund.
- ▶ 3:29:20 David Rosenthal I do think ETFs meaningfully change this equation for Vanguard, but in a sort of side way, just simply that the customer relationships could now be ported out of Vanguard easily.
- ▶ 3:29:33 Ben Gilbert Out of Vanguard, the brokerage.
- ▶ 3:29:35 Ben Gilbert But not out of Vanguard, the fund.
- ▶ 3:29:44 Ben Gilbert I'd have to think back to when I first started buying index funds, but I probably picked Vanguard over a Fidelity fund because they both looked de minimisly low fees, and I was like, oh, Vanguard's probably the right thing I'm looking for.
- ▶ 3:30:10 Ben Gilbert Now, interestingly, there is some wholesale transfer pricing because of the S&P licensing, where the branding is a Vanguard S&P 500 index fund, and Vanguard probably has to pay a good amount of what it makes on that fund to S&P Global.
- ▶ 3:30:32 Ben Gilbert There's something unique in the culture at Vanguard.
- ▶ 3:32:28 David Rosenthal I would suggest that Jack bifurcated the public equities market into commodity and non-commodity before Jack and before Vanguard.
- ▶ 3:34:20 David Rosenthal More than almost any other episode I can think of, the Vanguard story and Jack's story is proof that one single human being really can change the world.
- ▶ 3:34:51 David Rosenthal The Vanguard effect.
- ▶ 3:35:01 David Rosenthal Were it not for Jack Bogle and Vanguard?
- ▶ 3:35:20 Ben Gilbert So I wonder what that sort of floor would have been if not for Vanguard.
- ▶ 3:35:51 Ben Gilbert Vanguard opened their doors on May first, 1975.
- ▶ 3:36:22 David Rosenthal And, uh, we didn't put this in the narrative, but the initial founding headquarters location of Vanguard.
- ▶ 3:39:49 Ben Gilbert Also on Vanguard, we just did one two days before this episode came out that came out in the weekend edition of the Wall Street Journal.
- ▶ 3:44:04 Ben Gilbert Are they actually Vanguard shoes?
- ▶ 3:45:23 Ben Gilbert Vanguard.
- ▶ 3:45:31 Ben Gilbert And we didn't get to it in this episode, but he has sort of a framework on how you could create a valuation for Vanguard at the end of his write-up, which is cool for anyone who wants to check that out.
- ▶ 3:45:50 Ben Gilbert To Bill McNabb, the former CEO of Vanguard, 2008 to 20 17, and thirty-year veteran of the firm, thank you so much for hopping on the phone with us multiple times to kind of work through a few different things that we were thinking about.
- ▶ 3:46:18 David Rosenthal Author of the intelligent investor column in the journal, and one of the most prolific authors on the entire fund space, and of course, Vanguard and Jack Bogle throughout his life.
10 Years of Acquired (with Michael Lewis) · Acquired
- ▶ 22:08 David Rosenthal You're not like Vanguard here.
The Steve Ballmer Interview · Acquired
- ▶ 2:18:36 David Rosenthal Basically, besides Vanguard.
Renaissance Technologies (Audio) · Acquired
- ▶ 1:20 David Rosenthal When I was in college, I actually took an economics class with Burton Malkiel, who, of course, you know, was involved in starting Vanguard and is a big proponent of all that, and that is what I learned, Ben.
Visa (Audio) · Acquired
- ▶ 2:28:12 Ben Gilbert I mean, now Visa is owned mostly by big institutional shareholders, the vanguards and fidelities of the world, and the banks are much smaller shareholders.
Stratechery (with Ben Thompson) · Acquired
- ▶ 4:03 Ben Miller And Vanguard basically consistently beat the best hedge funds in the world.
- ▶ 4:19 Ben Miller It's like a vanguard for the private technology markets.
Benchmark Part I · Acquired
- ▶ 6:20 Ben Miller Passive, Vanguard, index funds.
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