Vanguard Is 50! Here's How It Has Made Investing Better
Vanguard was established by John C. Bogle in May 1975, and the fund manager's impact on investing has been revolutionary.


John C. Bogle founded Vanguard on May 1, 1975, and over the past 50 years, the asset management firm has transformed the way we invest.
Indeed, in 1976, Bogle launched the First Index Investment Trust, which was later renamed the Vanguard 500 Index Fund (VFIAX). Its purpose was to give retail investors broad-market exposure at a low cost, and its strategy was to simply track the S&P 500 Index.
In 2001, Vanguard began offering its mutual funds as exchange-traded funds, launching the Vanguard Total Stock Market ETF (VTI) as a lower-cost, more accessible offshoot to its Vanguard Total Stock Market Index Fund (VTSAX).

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The firm's fund offerings now stand at 215 in the U.S. and 225 in international markets.
Most popular are the Vanguard 500 Index Fund and the Vanguard S&P 500 ETF (VOO), with net assets totaling $1.3 trillion.
What's more, VOO recently surpassed the SPDR S&P 500 ETF Trust (SPY) as the largest exchange-traded fund, with assets under management of $605 billion.
Low costs, accessibility are key to Vanguard's approach
True to its word to keep costs as low as possible, Vanguard became the first fund group of its size to switch to no-load mutual funds. In other words, it would not charge sales tax on purchases of Vanguard funds.
Since 1975, its average expense ratio has dropped to 0.07% from roughly 0.7%. The current ratio is well below the industry average of 0.44%.
More recently, Vanguard initiated a massive fee cut on nearly 90 funds to lower costs even more.
"50 years ago, Jack Bogle started a revolution," says Vanguard CEO Salim Ramji. "Everything we do is grounded in the belief that investing should be lower cost and more accessible."
In addition to introducing cheap ETFs and mutual funds, the investment firm in 1995 began offering a "Plain English" fund prospectus for its funds to cut out confusing investing jargon and legalese.
And in 2003, the investment firm launched target-date funds, the set-it-and-forget-it funds that are popular in retirement savings plans.
Vanguard's approach, Ramji adds, has "earned the trust of 50 million investors."
Bogle's best advice
Vanguard founder Jack Bogle is known for his timeless advice, and each year, followers gather together during the "Boglehead Conference" to recall his adages.
Among them is Bogle's insistence that "costs matter" when it comes to investing.
"To a modern investor, this is just common sense," wrote Kiplinger contributor John Waggoner in January 2019 after Bogle passed away. "The less money you give to your fund (or your broker), the more money you keep. But to people in the pre-Vanguard world – especially those in the mutual fund industry – it was heresy."
Bogle is also known for saying, "Don't look for the needle. Buy the haystack." In other words, investors are better off owning a broad, diversified portfolio rather than trying to pick individual winners.
And most relevant to the jittery market we currently find ourselves in is Bogle's advice to "stay the course" and not make knee-jerk reactions to volatile price moves.
Related content
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.
-
Should You Give up a Car in Retirement?
If you own two cars, shedding one might be easier than you think. And the freedom from rising vehicle expenses can bring relief to retirees.
-
Tariffs Could Make Baby Items More Expensive
Upcoming tariffs on baby items like car seats and cribs could raise costs for families, but shopping smart can help you save.
-
Have You Reviewed Your 401(k) Beneficiary Designations Lately?
If you've had any life changes — marriage, divorce, a new baby or retirement — you might want to make sure your beneficiaries are in order.
-
How 401(k) Auto Portability Boosts Women's Retirement Savings
Women already face an uphill battle when saving for retirement. Auto portability tech transfers their 401(k)s when they change jobs, which can add up over time.
-
Stock Market Today: Stocks Rally Back Before Mag 7 Earnings
An unexpected contraction in the U.S. economy and dismal jobs data arrived ahead of earnings from some of Wall Street's biggest names.
-
May Fed Meeting: Live Updates and Commentary
The May Fed meeting is a key economic event, with Wall Street looking to see what Fed Chair Powell & Co. will do with interest rates amid tariff uncertainty. The May Fed meeting is a key economic event, with Wall Street looking to see what Fed Chair Powell & Co. will do with interest rates amid tariff uncertainty.
-
AI vs the Stock Market: How Did Value Stocks, Gold and PayPal Perform in April?
AI is a new tool for investors to use for data analysis, but can it beat the stock market? Here's how a chatbot's stock picks fared in April.
-
Why I Think You Should Buy Stocks to Cope with Inflation
What's the best way to protect your investments when inflation rises and the value of the dollar falls? Surprisingly, the answer may lie in buying stocks.
-
Why Gray Divorce Happens and Five Ways to Avoid It
Emotional intelligence is a key ingredient in a relationship's long-term success, and it can be learned or strengthened at any age. A psychologist explains how.
-
Four Times DIY Investors Should Talk to a Financial Adviser
While it's possible to manage investments without professional help, there are times when independent guidance from a professional may be invaluable.