With the triumph of index fund investing, Vanguard is growing faster than everybody else combined as investors everywhere are pouring money into Vanguards. The $4.2 trillion mutual fund giant is indisputably the king of mutual fund industry. The New York Times reported:
In the last three calendar years, investors sank $823 billion into Vanguard funds, the company says. The scale of that inflow becomes clear when it is compared with the rest of the mutual fund industry — more than 4,000 firms in total. All of them combined took in just a net $97 billion during that period, Morningstar data shows. Vanguard, in other words, scooped up about 8.5 times as much money as all of its competitors…
The effect within Vanguard has been no less profound. For decades, the firm has made the case that cheaper index funds will, over time, outperform more-expensive mutual funds that rely on brainy portfolio managers to pick stocks.
The main advocate of this doctrine was the founder, John C. Bogle, who retired in 1999 but runs a research operation on the Vanguard campus. For years, the firm has relied more on his simple message and the passion of his devotees than on fancy advertising campaigns to spread the word.
Unlike its peers, Vanguard is owned by its funds — and ultimately its investors — so as money rushes in, expenses are persistently reduced, resulting in perpetual savings for the legions of Vanguard clients.
If you would like to get your fair share out of Wall Street while avoiding high fees, transfer your money into Vanguard funds. Average fees on Vanguard funds have fallen to about 0.12 percent. In investing, you get what you don’t pay for.