Friday, July 31, 2015

Vanguard grew while other funds dropped

Despite a woeful showing by Windsor and other value-stock funds, Vanguard Group gained business last year while other fund companies lost accounts, Barron's reports.

Vanguard grew while other funds dropped


The current Barron's has an interview with new Vanguard chief executive F. William McNabb. He says the mutual fund company, which employs around 8,000 at Malvern headquarters and other local offices, is in better shape than other fund companies. The Financial Times' mutual fund site summarized the article.

"Last year through November, (Vanguard) bucked the industry trend by taking in a net $27.3 billion, compared with the industrywide $150.8 billion in outflows. (Note: Vanguard spokesman Amy Chain says the Vanguard inflow was $84 billion for all of 2008). Those kinds of flows seem poised to hold up as investors look for low-cost options and the industry heads into expected consolidation...

"McNabb, who took over in August, says Vanguard's top priority is to improve communications with investors, in part by hosting more webinars targeted to different investor populations. Another goal is to add international investors. Just 7% of its client base comes from abroad, but McNabb says Vanguard should be able to double that percentage 'over an intermediate time.'

PhillyDeals has written that Vanguard has slowed hiring (as other fund companies cut jobs). But Vanguard might also add some jobs: "By May, McNabb says he expects Vanguard will have assumed all clearing, settlement, custody, reporting and regulatory responsibilities for its Vanguard Brokerage Services. Those duties are now handled by Pershing" up in Jersey City. 

"One big challenge for Vanguard is restoring the reputation of value investing. Funds like its Windsor tumbled 41.1% last year amid dreadful showings by other value stalwarts."



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PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

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