Inside Vanguard: Leadership Secrets From the Company That Continues to Rewrite the Rules of the Investing Business

CAHPTER 19

LOOKING AHEAD

With its ability to raise over $5 billion of capital to finance a major commitment, low-cost, low-margin Vanguard has become a strategic financial powerhouse. As Buckley and his board and management team look ahead, the Vanguard flywheel can generate substantial financial resources that begin with a very small percentage in fees and yield a very large total capacity to invest in new capabilities, services, and products. That enormous financial power will enable Vanguard to disrupt the mutual fund industry again—and again.

One basis point is tiny: a mere one-hundredth of 1 percent. But even something so very small, when multiplied by a very large number, can become quite big. Vanguard now manages over $8 trillion: $8,000,000,000,000! ...