Vanguard

Definition

Vanguard is an investment management company known for its low-cost mutual funds and ETFs. It is a key player in the US financial markets, emphasizing long-term investment strategies and passive management.

5 Must Know Facts For Your Next Test

1. Vanguard was founded by John C. Bogle in 1975.
2. It introduced the first index mutual fund available to individual investors.
3. Vanguard operates on a unique client-owned structure where the investors own the funds, and the funds own Vanguard.
4. The company advocates for low-cost investing and has some of the lowest expense ratios in the industry.
5. Vanguard's Total Stock Market Index Fund is one of the largest mutual funds in the world by assets under management (AUM).

Review Questions

• Who founded Vanguard, and what year was it established?
• What is unique about Vanguard's ownership structure?
• Why are Vanguard's expense ratios significant in the financial markets?

Related terms

Mutual Fund: A type of investment vehicle consisting of a portfolio of stocks, bonds, or other securities managed by professional managers

Exchange-Traded Fund (ETF): A type of security that involves a collection of securities—such as stocks—that often tracks an underlying index

Index Fund: A type of mutual fund or ETF designed to follow certain preset rules so that the fund can track a specified basket of underlying investments