Vanguard Assets Under Management (AUM)
Vanguard has one of the largest selections of mutual and exchange-traded funds in the world. Because so many investors trust the broker-dealer with their assets, the company has very deep pockets. There are more than 15,000 people who work for the privately-held company. Technically, it is owned by its funds, which in turn are owned by their shareholders.
The company has the following impressive stats:
| Vanguard assets under management |
$4.5 trillion |
| Number of funds |
370 |
| Number of investors |
20 million |
| Average expense ratio |
0.12% |
With such large assets, the broker is able to charge low expense ratios for managing its funds. There are actually two share classes that vanguard offers: Admiral and Investor. The Investor class has lower minimum investment amounts, but comes with slightly higher expense ratios. The Admiral class imposes higher minimums, typically $10,000, $50,000, or $100,000, depending on the fund, but has lower management costs. The difference between Admiral and Investor is usually around 10 basis points.
Vanguard was founded in 1975 by famous investor John Bogle, although the company’s oldest fund stretches back to 1929 when the Wellington Fund was set up. Under Bogle’s leadership, Vanguard launched the world’s first index mutual fund in 1976 to track the S&P 500. Today, it is one of the largest mutual funds in the world with over $300 billion in assets—just one fund!
In addition to its US-based offices, Vanguard also has operations in China, Australia, England, France, Singapore, Japan, Canada, and Switzerland. The company has clients in roughly 170 countries.
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Advantages of Choosing a Large Broker
With so many assets and customers, Vanguard is able to offer many different services. It provides education planning and retirement advice. Its affiliate, Personal Advisor Services, offers portfolio management for just 0.30% annually. The service does require a $50,000 minimum account balance. It comes with personal advice from a human consultant on a variety of issues, such as a new home purchase.
One of the reasons Vanguard is able to offer its famous low expense ratios is that it has literally trillions of dollars invested in its funds. With such a large asset base, the company can charge ultra-low expense ratios and still remain profitable.
Comparison
Vanguard is very large by industry standards. Nevertheless, it is smaller than Fidelity, whose customers have deposited nearly $5 trillion with the firm. Fidelity also has over 24 million brokerage accounts, and offers a robo-advisory service, which Vanguard does not provide. Fidelity is also America’s biggest IRA broker.
Schwab is slightly smaller with roughly $3 trillion in client assets. It operates a nationwide network of branch locations, currently boasting more than 300 locations. Vanguard does not provide brick-and-mortar locations. Schwab has slightly more than 10 million brokerage accounts open, which probably puts the firm below Vanguard, which, as we have seen, has 20 million customers.
Vanguard Overview
Fund investors who want to buy and sell without paying commissions should check out Vanguard. The broker manages its own selection of mutual and
exchange-traded funds, offering 127 mutual funds and 55 ETF's. These also come with very low expense ratios, sometimes below 0.10%. Vanguard customers
have access to over 16,000 mutual funds in total. Customers who invest at least $50,000 in Vanguard funds also receive discounts on stock commissions,
paying as little as $0 in some cases.
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Choosing the Right Fund
When it comes to flashy features and catchy investment tools, Vanguard takes a pass and sticks to only what you need to know.
The side-by-side comparisons offered on Vanguard’s Personal Investor website let you hand pick individual funds to compare. In a matter of moments, an investor can compare performances over various time periods, yields and distributions, and even expense ratios. This simple tool helps investors quickly narrow down the 200+ available funds to determine which ones are most appealing to their needs.
Another helping reporting tool that Vanguard provides is the ability for an investor to set a personal target portfolio mix. By inputting how much you would like to have in stocks, bonds, and short term reserves, Vanguard will compare your actual portfolio with your target portfolio. When your current portfolio beings to drift away from your target, you will receive a friendly alert notifying you of the difference and asking if you would like to rebalance your portfolio.
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