Have you ever heard about The Vanguard Group, Inc.?
If not, all you have to do is keep reading this article. The Vanguard Group, Inc. is an American registered investment advisor based in Malvern, Pennsylvania with about $7 trillion in global assets under management, as of January 13, 2021.
It is the largest provider of mutual funds and the second-largest provider of exchange-traded funds (ETFs) in the world after BlackRock's iShares. In addition to mutual funds and ETFs, Vanguard offers brokerage services, variable and fixed annuities, educational account services, financial planning, asset management, and trust services. Several mutual funds managed by Vanguard are ranked at the top of the list of US mutual funds by assets under management. Along with BlackRock and State Street, Vanguard is considered one of the Big Three index fund managers that dominate corporate America.
At Vanguard they believe in offering clients the best chance of investment success. People at Vanguard think they can achieve this through low costs, straightforward products and being aligned with our clients' goals.
They are a different kind of investment company believing in making money for investors, not from them. Thanks to the mutual ownership in the US, they're in a position to keep costs low without compromising on quality. Our investors keep more of their returns and can potentially earn more over time.
Vanguard builds straightforward products, presented in a plain-talking manner. The funds offer easy access to a diversified range of assets. The funds offers, the services they provide, every decision they make, is designed to benefit you, the client. Vanguard was founded in 1975 and it is now one of the largest asset managers in the world. They believe their growth over the last 40 years comes from taking a stand for all investors and treating them fairly. Vanguard is committed to bringing their UK and European clients the same benefits that have driven our growth globally.
WHAT MAKES Vanguard DIFFERENT?
Low cost, uncomplicated investing. Investors can’t control the markets, but they can control the costs of investing. Every pound or euro paid in fees is a pound or euro less of potential return.
Vanguard's scale and ownership structure helps us keep costs low. With no shareholders to please, they can return our profits to investors through lower costs. As they gain more investors, and their assets under management grow, they can reduce expense ratios further for our investors.
Active and indexing experts The Vanguard Group established the world's first index mutual fund for individual investors in 1976. Vanguard were first to offer funds tracking bond or international indices, and have been a leader in low-cost index investing ever since. Over the last decade Vanguard has extended their index management expertise to exchange traded funds, where they're now one of the world's largest providers.
But Vanguard is not just an expert in index funds. Vanguard has a deep history of active management, having managed active funds since the beginning in 1975. With over USD 1.6 trillion in active assets (as at 31 December 2020), they are one of the largest active managers in the world.
Vanguard wants to provide investment funds that help investors achieve their goals and let them keep as much as possible of their returns. As they see it, that aligns their purpose to their investment success.
THE VANGUARD STORY
Over the decades, Vanguard has grown to become one of the world’s largest investment management companies, with a presence in Australia, Europe, Asia and the Americas. Today, Vanguard is trusted by over 30 million investors globally, with more than USD 7.1 trillion in assets under management.
With offices in Amsterdam, Dublin, Frankfurt, London, Paris and Zurich, Vanguard leverages the scale, experience and resources of its well-established global business for investors right across Europe.
CHAMPIONING INVESTOR INTERESTS
Their mission starts with taking a stand for all investors and this is a statement that they take seriously.
They have clear views on governance, which are communicated openly. Vanguard works with politicians, regulators and professional associations to develop a robust regulatory framework for the benefit of investors.
Vanguard is proud of the ‘Vanguard effect’, the observation that when Vanguard enters a market, others are likely to follow their example, particularly by lowering costs.
From rigorous risk management to transparent pricing to plain talk communications, they put their clients’ interests first.
Everything done at Vanguard is designed to give the clients the best chance for investment success.
PRINCIPLES FOR INVESTMENT SUCCESS
At Vanguard four simple principles run through everything that they do. They have been intrinsic to the company since its inception, and are deeply embedded in their culture. For Vanguard, they represent both the past and the future - enduring principles that guide the investment decisions we make.
Create clear, appropriate investment goals The investment process begins by setting measurable and attainable investment goals and developing plans for reaching those goals.
Develop a suitable asset allocation using broadly diversified funds. A successful investment strategy starts with an asset allocation suitable for its objective. You should establish an asset allocation using reasonable expectations for risk and potential returns. The use of diversified investments helps to limit exposure to unnecessary risks.
Minimise cost You can’t control the markets but you can control how much you pay to invest. Every pound or euro that you pay in costs and charges comes directly out of your potential return. Indeed, research suggests that lower-cost investments have tended to outperform higher-cost alternatives.
Maintain perspective and long-term discipline Investing evokes emotion that can disrupt the plans of even the most sophisticated investors. But you can counter emotions with discipline and a long-term perspective. This can help you stick to your plan.
Also, I would like to tell you something about one of my loved ETFs. This is Vanguard FTSE All-World UCITS ETF.
I personally like the Distributing one. Distributing means you will receive dividends for every Vanguard FTSE All-World share you own.
Of course you can choose the accumulating version.
The dividends in the fund are automatically reinvested. This securing the compound effect . You can find it using the ISIN code: IE00B3RBWM25.
The Fund employs a passive management or indexing investment approach, through physical acquisition of securities, and seeks to track the performance of the FTSE All-World Index.
The Index is comprised of large and mid-sized company stocks in developed and emerging markets.
The Fund attempts to: 1. Track the performance of the Index by investing in a representative sample of Index constituent securities. 2. Remain fully invested except in extraordinary market, political or similar conditions.
Here are some characteristics:
Number of stocks included in this ETF is around 3700. Median market cap $86B. Equity yield or dividend of 1.9%.
The top 10 companies are:
Apple, Microsoft, Alphabet, Amazon, Tesla and so on.
The market allocation is dominated by United States with 59.2% Followed by Japan, United Kingdom, China, France and so on. The total expense ratio (TER) of FTSE All-World ETFs is at 0.22% p.a.. In comparison, most actively managed funds do cost much more fees per year.
Another interesting aspect is the Weighted exposure
Sector categories are based on the Industry Classification Benchmark system (“ICB”). We can see Technology, Financials, Consumer Discretionary, Industrial, Health care and so on. All the above makes the Vanguard FTSE All-World ETF a great tool for long term investing.
Thank you for reading and until next time, take care of your money!