, Columnist
Understanding What Makes Vanguard So Successful
Low costs help, but that's only part of the explanation.
No flash here.
Photographer: Mike Mergen/BloombergThis article is for subscribers only.
There's never been a money-management business like Vanguard Group Inc. Any time it enters a new market, competitors see their margins demolished via the so-called Vanguard effect. No other firm controls costs the way it does. And since the financial crisis, no other firm has attracted more assets more quickly. Since 2009, Vanguard has expanded from about $1 trillion in assets under management to almost $5 trillion.
Only Blackrock Inc. has more assets under management, but it has only doubled in size during the same time period. Assuming current growth rates hold, Vanguard should pass Blackrock in size.