That's Why They Call It Vanguard
It pioneered index funds--and now it's outpacing its rivals
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Four years ago, the no-frills Vanguard 500 Index Fund nearly doubled its assets, to $17.3 billion, swelled by a 37% annual return and $4.7 billion in new cash. At the time, then Vanguard Group Chairman John C. Bogle expressed some concern. The fund, which had operated in obscurity for 20 years, had become the darling of the day. "I'm a little worried that the index fund is hot," he said. "Hot is not our style."
Well, if the index fund--which tracks Standard & Poor's 500-stock index--was hot then, it's absolutely sizzling now. And building on the success of the S&P and other spin-off index funds, Vanguard--the nation's largest mutual-fund company after No. 1 Fidelity Investments--has become the hottest mutual-fund firm.