Vanguard announced late Thursday that Chief Investment Officer Tim Buckley has been named president and director of the index fund giant. As of Jan. 1, 2018, he will also succeed Bill McNabb as Vanguard’s fourth chief executive officer since it was founded in 1975.
“Vanguard has helped to bring cost savings to many fund investors, including those that have chosen a different asset manager to work with. Vanguard tends to have among the lowest-cost products in their investment style and regularly lower fees, benefiting from its scale,” said Todd Rosenbluth, director of ETF & mutual fund research at CFRA.
“In addition, when they have had success, it has often resulted in peer providers lowering fees and/or launching new, cheaper products designed to regain lost market share. The successful iShares Core Series and Fidelity’s sector ETF lineup are a couple of examples,” he added.
Vanguard is the second-largest ETF issuer, with $736 billion in assets under management (AUM) in its 70 ETFs. It was the first firm to promote index funds for retail investors, with the Vanguard 500 serving as its flagship product. Across all its products—which include more than 300 mutual funds and ETFs—the firm manages $3.8 trillion, according to the press release.
‘Lower-Cost Diversified Products’
“Vanguard’s mutual funds and ETFs have gained additional share the last few years as investors have focused increasingly on lower-cost diversified products. While the firm is known for its passive funds, active offerings (e.g., Vanguard Wellington, Vanguard PrimeCap and Vanguard Dividend Growth) have established strong records and remained popular despite outflows for many mutual fund peers,” Rosenbluth said.
He points out that although Vanguard only has 70 ETFs in its lineup, those funds on average have more than $10 billion each in AUM. CFRA expects Vanguard to launch active equity and smart-beta ETFs in the near future, Rosenbluth says.
Buckley joined Vanguard in 1991 as an assistant to founder John Bogle, and by 2001, had become a member of its senior leadership team. He was named its chief investment officer in 2013.
McNabb says the time is right for Vanguard to have a new leader and that Buckley is the “ideal next chief executive for Vanguard.” McNabb was named CEO in 2008 and will continue to serve as the chairman of Vanguard’s board.
The position of chief investment officer that Buckley is vacating will be filled by Greg Davis, currently the global head of Vanguard’s fixed income group, the press release said.
Contact Heather bell at [email protected].