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Why ownership matters

Helping our clients succeed is our sole purpose

You find out the importance of ownership when you follow the money.

Typical investment management companies are owned by outside stockholders. These companies have to charge fees to pay their owners, which can reduce investors' returns.

At Vanguard, there are no outside owners, and therefore, no conflicting loyalties. The company is owned by its funds, which in turn are owned by their shareholders—including you, if you're a Vanguard fund investor. Our unique client-owned structure allows us to return profits to our fund shareholders in the form of lower expenses. Low costs help our clients keep more of their returns, which can help them earn more money over time.

In other words, Vanguard is structured as a "mutual" mutual fund company. Our interests are completely aligned with those of our clients. We never have to weigh what's best for clients against what's best for the company's owners, because they are one and the same.

Investors around the world can benefit from the result: stability, transparency, long-term perspective, rigorous risk management, low costs, and a bedrock commitment to their best interests. No wonder our clients have proven to be extraordinarily loyal.

Vanguard is different from the rest—and here's how our investors benefit.

The typical fund management company is owned by third parties, either public or private stockholders, not by the funds it serves. These fund management companies have to charge fund investors fees that are high enough to generate profits for the companies' owners. In contrast, the Vanguard funds own the management company known as Vanguard—a unique arrangement that eliminates conflicting loyalties. Under its agreement with the funds, Vanguard must operate "at-cost"—it can charge the funds only enough to cover its cost of operations. No wonder Vanguard's average asset-weighted fund expense ratio in 2018 was 0.10%, less than one-fifth that of the 0.58% industry average* (excluding Vanguard).

*Source: Morningstar, Inc.

All investing is subject to risk, including possible loss of the money you invest.

For more information about Vanguard funds, visit to obtain a prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.

© 2017 The Vanguard Group, Inc. All rights reserved. Vanguard Marketing Corporation, Distributor of the Vanguard Funds.

Our client-first approach and "the Vanguard effect"

Map showing Vanguard offices worldwide as of 2019

Because we're not publicly traded, Vanguard can stay focused on the long term, rather than catering to outside owners or the short-term expectations of Wall Street. We're able to support our fund managers in seeking superior performance over many years, and we can make long-term investments to help improve services and reduce costs for our client-owners.

That's how we've been able to keep lowering the costs of investing ever since our launch in 1975. In fact, our presence has created what's been called "the Vanguard effect"*: As we enter new markets around the globe, other investment companies have responded by cutting their fees to compete.

*Morningstar, Inc., June 29, 2009.