• Last Updated:
  • May 11th, 2010 2:52 pm
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[OP]
Sr. Member
Jul 20, 2005
691 posts
3 upvotes

About Vanguard Group

I found it very interesting that Vanguard Group is Client-Owned company.

From it's website:
"Most investment firms are either publicly traded or privately owned. Vanguard is different: We're client-owned. Helping our investors achieve their goals is literally our sole reason for existence. With no other parties to answer to and therefore no conflicting loyalties, we make every decision—like keeping investing costs as low as possible—with only your needs in mind."



What's the implication to investors buying it's funds?? In terms of stability of its(Vanguard Group) balance sheet, chance of the it going bankrupt etc. I can't find its balance sheet...
4 replies
Deal Addict
User avatar
Apr 29, 2002
3855 posts
45 upvotes
Mississauga
<3 Vanguard. If you take look at the corporate structure, Each individual fund owns Vanguard itself.

[QUOTE]First, The Vanguard Group Inc. (VGI) is actually a subsidiary of the various mutual funds, each of which is a separate legal entity. The best way to describe Vanguard's unique structure would be to think of General Motors turned upside down, with Chevrolet, Cadillac, Oldsmobile, Pontiac, etc. as the corporate parents, and General Motors as a subsidiary. If you think of Chevrolet, Cadillac, Oldsmobile, Pontiac, and the other GM divisions as mutual funds, and General Motors (the subsidiary, in this situation) as Vanguard Group Inc., you'll get the picture.

Since VGI is actually owned and funded by the various mutual funds, it technically couldn't go bankrupt unless all of the various mutual funds that support it went bankrupt. The only way that could happen would be for the value of all of the stocks and/or bonds held by each and every individual Vanguard mutual fund to go to zero. So, forget about Vanguard going bankrupt -- it just isn't going to happen. [/QUOTE]

See this - what if Vanguard were to go broke?
http://wiki.indexplanners.com/Vanguard_safety
Banned
Feb 17, 2007
3190 posts
202 upvotes
tell me if Vanguard Group is going public lol. You better buy some of their holdings before they go public.

If you have some of their holdings, you have the right to purchase its IPO.
Guess where the money they gathered is going to? It goes back to the company. In return, it will double the company's worth.
Deal Addict
Jul 28, 2005
3237 posts
25 upvotes
ACC-Major wrote:
May 10th, 2010 11:56 pm
In return, it will double the company's worth.
The company has almost no worth to start with.

Vanguard doesn't own any of the stocks or bonds in their mutual funds. Vanguard is simply a small company the manages the stocks and bonds.

Vanguard's expenses are the costs it takes to manage all of the mutual funds. The owners of Vanguard pay Vanguard enough to pay all of its expenses and not a cent more.


So basically, Vanguard is a not for profit company. Why would a not for profit company have an IPO? And why would anyone want to buy it?

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