The Vanguard Advantage

Vanguard Chairman and CEO John J. Brennan says he gets no pleasure watching investors withdraw billions of dollars from scandal-tainted mutual-fund families such as Janus Capital Group Inc. (JNS ) and Putnam Investments Inc. (PEYAX ) "I don't want to dance on the graves of my competitors," he says.

But there has to be some revelry behind the scenes at Vanguard Group Inc., the nation's second-largest fund family, with $690 billion in assets under management. Since the mutual-fund probe became public in September, inflows into Vanguard funds have soared by $13.5 billion, according to estimates from AMG Data Services in Arcata, Calif. That makes no-load Vanguard the second-most-popular fund family for new money behind broker-sold American Funds, which attracted an estimated $16 billion in the same period. In total assets, Vanguard is second only to Fidelity Investments, which has $954 billion.