INDEX
Acadian Asset Management, 95
Acquisitions (see Mergers and acquisitions)
Active investing, 77, 87–100, 202–203, 225–226
Active quant investing, 96–97
Actively-managed ETFs, 112–113
Administration costs, 48–50, 59
Admiral Share pricing, 71, 83, 126
Admiral Short Term Portfolio, 226–227
Advice-embedded products, 71, 185, 199–211, 237–238
Advisor’s Alpha process, 208–209
Aggregate capacity, 152
Algorithmic investment advice, 210–211
Alipay, 236
All-equity mutual funds, 17–22
Alliance Capital Management, 144, 266n1
Alphabet, 97n*
American Brick, 4
American Can, 4
American Express, 195
American Funds, 97
American Investment Council, 194
American National Bank, 58n*
American Stock Exchange, 245
Ant group, 235–236
Aperio, 210
Apple, 97n*
Aristotle, 242
Armstrong, Philander Bannister, 3
Asian Contagion, 109–110
Asset growth, at Wellington, 151–153
Assets, fees as percent of, 74
Atlanta, Ga., 150
Augar, Philip, 173
Bache & Co., 23
Bailout obligations, 229–230
Balanced Index, 105
Balanced life, 250–251
Bank of New York, 174
The Bank That Lived a Little (Augar), 173
Barclays Bank, 169, 170, 173–175
Barclays DeZoete Wedd Investment Management Ltd., 170
Barclays Global Investors (BGI), 111, 170–175, 245
Barringer, Brendon, 16
Barron’s magazine, 81
Barrow, Hanley, Mewhinney & Strauss, 95
Barrow, James, 95
Batterymarch Financial Management, 56–58, 124
Bay Banks, 154
Beating the market, 202–203, 208
Behavioral coaching, 208–209
Beijing, China, 150
Benchmark price, 94
Berkshire Hathaway, 171–172
BGI (see Barclays Global Investors)
“Big Money in Boston” (Fortune article), 8
“Big tent” model of management, 151–153
Bill-paying service, 83
BlackRock, xi, xii, 10, 169, 172–175, 184, 210, 222, 224
Blair, William, 171–172
Bligh, William, 50n*
Bloom, Steven, 245
Bloomberg Television, 181
“Blue water” strategy, 70–71
Board of directors, 191–192, 214, 218
Bogle, David Caldwell, 3, 4, 6
Bogle, Eve, 20
Bogle, John Clifton “Jack,” ix–xiii, xvi, 78, 200, 239–240
achievements of, 11–12
Jack Brennan and, x–xi, 117–120
changeover to Brennan’s leadership from, 126–128
death of, 140–141
departure from Wellington, 29–43
early career of, 13
frugality of, 73–74
governance under, 226–228
health concerns, 20–21, 27, 31–32, 57, 119, 127–129
hiring decisions, 160–161, 179–180
legacy of, 137–139
media interactions, 81–82, 126–127, 132, 134
retirement of, 119, 127–128, 132–134
sacred-cows speech, 70–71, 121
“Saint Jack” image of, 34, 133
Vanguard–Wellington relationship under, 45–51, 143–145
Bogle, Josephine, 3
Bogle, Josephine Lorraine Hipkins (mother), 3, 4, 8, 138
Bogle, Lorraine (sister), 3
Bogle, William Yates, III, “Bud,” 3, 5–7
Bogle, William Yates, Jr., 3, 4
Bogle Financial Markets Research Center, 137
Bogle on Mutual Funds (Bogle), 8
Bogle Scholars, 12
Bogleheads, x, 12, 138–140, 195n*
Bogleheads Guide to Investing (Larimore et al.), 140
Bond fund, 31, 67, 68, 230–231
Bonds, xvi
Bonuses, employee referral, 182–183
Booraem, Glenn, 220, 221, 268–269n5
Boston, Mass., 17, 22, 24, 25, 27–28, 33
Boston College, 158
Boston Company, 159
Boston Consulting Group, 73
Bravo, Richard A., 231
Brennan, Catherine, 159
Brennan, Frank, 158–159
Brennan, John J. “Jack,” x–xi, xiii, 81, 105, 264n2
advice-embedded products under, 200, 205
Jack Bogle and, 117–120
compensation under, 84–86
culture under, 165–167
“do it yourself first” philosophy of, 167–168
early life and family of, 158–161
governance under, 217, 225, 228, 230–231
hiring decisions, 121–126, 189, 191
leadership style, 120–121, 157–158, 161–165, 249–255
leadership style of, 129–132
legacy of, 134–135
partnership with Wellington under, 143, 148–151
retirement of, 178–179
transition to leadership by, 126–128
Brennan, Mary, 158
Brigham and Women’s Hospital, 31–32
Brown Brothers Harriman, 153, 154
Buckley, Marilyn, 189
Buckley, Mortimer (father), 189
Buckley, Mortimer J. “Tim,” xiii, xvi, 83, 95, 130, 178, 187, 189–196, 200, 211
Buffett, Warren, 82, 171–172, 200, 222
Bulger, William, 159
Bull market (early 1980s), 69, 153, 180
Cabot, Walter M., 261n11
“Call out” boxes, 214
Calls, with investors, 78–79, 181
Cambridge Associates, 264n6
Campbell Soup, 262n4
Candor, serving investors with, 9, 140, 228, 229
Capital, ability to raise, 171–172, 175
Capital gains, 18
Capital Group, xii, 97–100, 241
Capital Opportunity Fund, 100, 228
Caring, culture of, 150
Carlyle, Thomas, ix
Case Western Reserve, 89
CDOs (collateralized debt obligations), 215
Center for Research in Security Prices (CRSP), 80–81
Certified Financial Planners, 205, 207
Chase Manhattan Bank, 178, 264n6
Chevron Texaco, 97
Chicago Mercantile Exchange, 245
Christ Cella, 98
Christianson, Fletcher, 50n*
Cisco, 107
Citibank, 66
Cleveland Clinic, 31
Client Services Group, Vanguard, 123
Client-centered organizations, 242
Closing, of funds, 227–228
CMH (Costs Matter Hypothesis), xi
CNN, 81
Coates, John C., 224–225
Collateralized debt obligations (CDOs), 215
Colonial group, 145
Comegys, Rodney, 101–104, 264n1
Commissions, 19, 21, 23–24, 57, 62–63, 102–103, 144, 186
Commitment, 125, 129, 177, 181–182
Common Stocks as Long-Term Investments (Smith), 80
Compensation, 84–86, 91, 93, 219–221
Competition, tenacity in, 163–164, 251
Complete replication strategy, 105
Concentrated share ownership, 223–226
Confessions of an Advertising Man (Ogilvy), 240
Continuous improvement, 165–166
Control, 119–120
Cooke & Bieler, 189
Corcoran, Richard, 36
Core Management Group, Vanguard, 105, 106
Cornfeld, Bernard “Bernie,” 26
Corning, 191
Corporate Compliance team, Vanguard, 161
Corporate substitution policy, 231
Cost management, 57–58, 73–86, 195–196
Costs Matter Hypothesis (CMH), xi
Cramer, Jim, 133
Cravath, 241
Crew’s News (newsletter), 166–167
Crozier, William P., 154
CRSP (Center for Research in Security Prices), 80–81
Culture:
for organizational excellence, 242
service, 125
symbols of, 149–150
at Vanguard, 104, 125, 132, 165–167
at Wellington, 70, 145, 146, 149–153
Cummins, 191
Curtis Publishing, 16
Customer service, 83–84, 236–237
Cybersecurity, 185–186
Dairy Queen, 171
Dartmouth University, 110, 159–160, 177, 218n*, 264n2
Davis Polk & Wardwell, 37
DAWAW (Don’t Ask Who—Ask Why!) philosophy, 165
Dean Witter, 60
Dearborn, Madison, 267n1
Decision making, 83, 92, 166–167
Defined benefit pension plans, 122–123, 200
Delaware, 153–154
Delegation, 129–130
Department of Labor, 153
Department of the Treasury, 192
Diamond, Robert “Bob,” 173, 174
Dipple, Pam, 265n7
Direct indexing, 210
DiStefano, Robert “Bob,” 121, 130, 160
Diversification, 151–152, 182, 192–194, 227–228, 246
Diversity, 130, 164, 218, 220, 251
“Do it yourself first” philosophy, 159, 167–168
Dodd-Frank Act (2010), 159
Donaldson, Lufkin & Jenrette, 144
Don’t Ask Who—Ask Why! (DAWAW) philosophy, 165
Doran, Robert W., 24–29, 33–35, 37–43, 45, 46, 69, 70, 143–145, 148–150, 154
Dow Jones Industrial Averages, 37, 60, 79, 231
Dowling, Chuck, 239
Dowling, Jean, 239–240
Dress code, 167
Drexel Harriman Ripley, 27
Dual-purpose mutual funds, 30
Duffield, Jeremy, 106, 160, 264n2
Duty of loyalty, 153
“The Economic Role of the Investment Company” (Bogle), 8–9, 13
Economics: An Introductory Analysis (Samuelson), 7
Edward Jones, 208
Efficient Markets Hypothesis, xi
Eisner, Richard A., 154
Emerging Markets Stock Index, 105
Employee referrals, 182–183
Employee retention, 82–83
Employee Retirement Income Security Act (ERISA), 108, 153, 154, 263n13
Employee Stock Ownership Plans (ESOPs), 153
Endowment Management & Research, 145
Enron, 269n5
Environmental, social, and governance (ESG) stocks, 210
Equity Index Group, Vanguard, 101, 106
Equity mutual funds, 68–69
ESG (environmental, social, and governance) stocks, 210
ESOPs (Employee Stock Ownership Plans), 153
Estate planning, 205
ETFs (see Exchange-traded funds)
European Stock Index, 105
Event-driven proxy voting, 221
Exchange-traded funds (ETFs), xvii, 109–113, 121, 245–247
advantages of, 246
Bogle’s opposition to, 82, 109
cost-effective value with, 77
and CRSP data, 79–80
ETF “sleeves,” 110–111
Financial Advisor Services and, 208, 210
tracking error with, 102
at Vanguard, 175
Vanguard’s bid for BGI, 169–173
(See also specific funds)
Executive compensation, 219–221
Exeter Fund, 62
Expectation setting, 251–252
Expense ratios, 68, 71, 75, 91, 93, 229
Extended Market Index Fund, 106
ExxonMobil, 223
Facebook, 97n*
Fama, Eugene, xi
Family offices, 199
FAS (Financial Advisor Services), 208–209
Federal Reserve Board, 192
Federal Trade Commission (FTC), 223–226
Feedback, for leaders, 253
Fees:
for active managers, 74–75
calculating, 74
management, xii, 40, 50, 65, 75, 79, 91, 202, 226
trading, 50
12b-1, 65
(See also Low fees; Transaction fees and costs)
Fidelity, xii, 68, 81, 118, 123–125, 145, 185, 199, 236–237
Fiduciary responsibility, 153, 230, 263n13
Financial Advisor Services (FAS), 208–209
Financial Engines, 205
Financial Industry Regulatory Authority (FINRA), 214–215
Financial Services Authority (FSA), 173
Financial Stability Board, 229
Financial Times, 79
Fine, Phil, 262n7
FINRA (Financial Industry Regulatory Authority), 214–215
First Index Investment Trust, 59–62
First Investors Corporation, 265n7
First-mover advantage, 59
Fixed-income investments, 237–238 (See also Bond fund)
Flagship investor specialists, 126
Flywheel 2.0 (at Vanguard), 184–185
Fortune magazine, 8
401(k) plans, 121–125, 180–181, 200, 204
Franklin Portfolio Associates, 96
Fraser-Jenkins, Inigo, 225
FSA (Financial Services Authority), 173
FTC (Federal Trade Commission), 223–226
FTSE Social Index Fund, 230
Fullwood, Emerson, 191
Fun, having, 255
“The Future Structure of Wellington Group of Investment Companies” (memo), 48–50
Gage, Jesse Witherspoon, 6
Gardiner, Robert “Stretch,” 64
GARP (growth at a reasonable price) managers, 96–97
Gately, James H., 78, 121–126, 129–130
Gemini Fund, 30
General Electric (GE), 107, 130
Gillette, 39
Girard Bank, 67
Glamour, 253
Global financial crisis (2008), 82–83, 107–108, 170, 174, 180–182, 229–230
Global Investment Committee, 191
Global thinking, 254
“Go shop” provisions, 170
Gooch, John, 150
Governance, 213–231
in 2008 financial crisis, 229–230
alignment of SEC and Vanguard, 213–215
under Brennan, 131–132
communicating unfavorable results, 227–231
doing the right thing, 227–228
as foundational principle, 10
of FTSE Social Index Fund, 230
New York investigation of mutual fund companies, 215–217
no-load shareholder lawsuit, 226
proxy voting, 217–226
rejecting accounts, 226–227
transparency, 221–223
Graham, Benjamin, 88
Great bear market (1973-1974), 37–38, 60
Greenmail, 57
Greenwich Associates, 239, 240
Growth at a reasonable price (GARP) managers, 96–97
Growth Index, 105
Guaranteed investment contracts, 178
Guardian Life Insurance of America, 192
Gutmann, Amy, 191
Gwynn, Phil, 150
Hahnemann University Hospital, 128–129
Haloid, 99
HarbourVest Partners, xiv, 192–194
Hard work, 250
Hartford, Conn., 17
Hartford Insurance Company, 146
Hartz Mountain, 153
Harvard Business School, 154, 158, 160, 161, 189–190, 268n5
Harvard College v. Amory, 154
Harvard University, 145
Haskins & Sells, 15
Hasting Foundation, 226–227
Hauptfuhrer, Barbara Barnes, 32, 47
Haverford School, 177–178
Hayes, Samuel, 154
Health Care Portfolio, 227–228
Healthcare benefits, employee, 195–196
Hedge funds, at Wellington, 151
Heller, Paul, 123
Henderson, Bruce, 73
“Here Come the Bogleheads” (Zweig), 139
Hiring, 121–126, 160–161, 166, 179–180, 189, 191
HMS Bounty, mutiny on, 50n*
Horn & Hardart, 5
Humility, institutional, 168, 250
Hurndon, Noah, 153
IBM, 192
Incentives, 91
Index funds and indexing, xvii, 77, 107–108, 121
cost effectiveness of, 77
Financial Advisor Services and, 208
as foundational principle, 10
impact on active investing of, 225–226
investor interest in, 106–108
objectives for, 101–103
proxy voting in, 217–226
retail, 58–60
Gus Sauter on, 104–105
trading mandates for, 103–104
(See also specific funds)
Index Participation Shares, 245
Individualism, 151
Industrial and Power Securities Company, 16–17
Industry disruption, 233–235
Information asymmetry, 77
Innovation, 56, 64, 70–71, 242
Institutional humility, 168, 250
Institutional investing, 32–33, 58, 121
Intel, 107
Intellectual growth, 254
International markets, 168, 186, 235–238
International Shareholder Services (ISS), 221
Investing, realities of, 201
Investment advice, algorithmic, 210–211
Investment Company Act (1970), 36, 65, 263n13
Investment planning, 205
Investor weekends, 106
Investors Overseas Services (IOS), 26
iShares ETF, 170–171, 173–175, 246
ISS (International Shareholder Services), 221
Ivy Club (Princeton), 7
Jansing, John C., 23–24
Japan, 236
Jenrette, Dick, 144
Joshi, Mohit, 195
JPMorgan Chase, 208
Just Invest, 210
Kapito, Robert, 173
Kemeny, John, 264n2
Kenney, Jerry, 170
Large-cap growth stocks, 107
Larimore, Taylor, 138–140
Late trading, 216
Layoffs, 82–83
Lazard (firm), 170
Leadership:
ethics of leaders, 161–165
and organizational excellence, 242
servant, 120–121
transition in, 126–128
Leadership development, 130–131, 253
Leadership style:
of Jack Bogle, 119–120
of Jack Brennan, 120–121, 157–158, 161–165, 249–255
of Bill McNabb, 186–187
Learning organizations, 165–166
LeBaron, Dean, 56–58
Legal Group, Vanguard, 124, 161
Lehman Brothers, 180–181
Leverage, 229–230
Levitt, Arthur, 214
A License to Steal (Armstrong), 3
LifeStrategy Funds, 101, 200, 201, 203
Limited liability partnership, 154, 266n10
Lindauer, Mel, 138
Liquidity, of ETFs, 112
London, England, 150
Long-term investment plans, 87, 132, 200, 201
“Looking Ahead” (memo), 70
Loomis Sayles, 63
Lorie, James H., 80
Los Angeles, Calif., 22
Loughrey, Joseph, 191
Loughridge, Mark, 192
Love, of people, company, and business, 250
Lovelace, Jon, 100
Low fees, xvi–xviii
for active management, 92
and Admiral Share pricing, 71, 83, 126
for advice-embedded products, 205–207
and augmented returns, 79–81
as business strategy, 74–77
as competitive advantage, 67, 68, 125
cost management required for, 73–74, 141
with ETFs, 246
as foundational principle, 10
and SEC, 214
in Vanguard flywheel, 183–184
virtuous cycle of, 73
Low P/E stocks, 90–91
Lown, Bernard, 31
Lux, Hal, 157
Lynch, Peter, 125
Ma, Jack, 236
MacKinnon, Ian A., x, 67–68, 78
Madison Dearborn, 267n1
Magellan Fund, 125
Malkiel, Burton, 73, 134, 263n2
Malpass, Scott, 191
Management fees, xii, 40, 50, 65, 75, 79, 91, 202, 226 (See also Expense ratio)
Mandatory retirement policy, 119, 132–134
Marcante, John, 185
Market exposure, of ETFs, 246
Market timing, 216
Marketing, push vs. pull, 64
Marx, Karl, ix
Massachusetts, 204
Massachusetts Bankers Association, 159
Massachusetts Business Development Corporation, 158
Massachusetts General Hospital, 189
Massachusetts Institute of Technology (MIT), 145, 262n4
Massachusetts Investors Trust, 8, 15
Massachusetts State Senate, 159
Mayo Clinic, 241
McFarland, Duncan, 148, 152, 265n7
McGessler, Walter, 13
McGraw-Hill, 79
McKinsey, 241
McNabb, F. William, III “Bill,” x, xiii, xvi, 123, 130
in 2008 financial crisis, 180–182
advice-embedded products under, 200
on bailout obligations for mutual funds, 229–230
as CEO of Vanguard, 168, 177–180
cybersecurity challenges under, 185–186
dress code under, 167
on governance, 225
highlights presentations by, 125
international expansion under, 186
leadership philosophy of, 186–187
on securities lending program, 79
Vanguard flywheel concept of, 183–185
McPhee, John, 138
Mean reversion, 204
Media, relations with, 81–82, 126–127, 132, 134
“Meeting Money” (seminar), 138–139
Mergers and acquisitions:
Alliance–Wellington merger, 144
of BGI’s ETF business, 169–175
TDP&L–Wellington merger, 23–31, 69–70, 98
Vanguard acquisition of Just Invest, 210
Merrill Lynch Asset Management, 80, 170, 173
Meta Platforms, 97n*
Miami Herald, 138–139
Microsoft, 107
Milias, Mitch, 97–100
Miller, Michael, 130, 161, 265n7
Miller, Paul F., Jr., 27
Mining Fund, 228
MIT (Massachusetts Institute of Technology), 145, 262n4
Mitchell, James F., Jr., 36
Mockler, Coleman, 39
Modern Portfolio Theory, 107
Mohuck (online commenter), 133
Money magazine, 81
Money market mutual funds, xvi, 66–67, 215
Morgan, J. P., 63
Morgan, Walter, 13–22, 25, 28, 34, 36, 39, 40, 64
Morgan and Company, 15
Morgan Growth Fund, 30
Morgan Guaranty Trust Company, 30, 266n1
Morning Meetings, 25–26, 149–150
Morningstar, xii, 132–133, 138
MSCI, Inc., 245
Mulligan, Deanna, 191–192
Munger, Charlie, 222
Municipal bond funds, 65–66
Mutual fund companies:
bailout obligations for, 229–230
New York Attorney General’s investigation of, 215–217
all-equity, 17–22
changing managers of, 37
dual-purpose, 30
equity, 68–69
managed by Vanguard with Wellington, 146–147
management companies’ ownership of, 40
retail distribution of, 32–33, 48, 50
Mutualization, 36, 39–41, 46–47
National Association of Securities Dealers, 18
National City Bank, 88–89
National Constitution Center (Philadelphia), 12
National Investors, 89
Neff, John, x, xvi, 20, 30, 42, 69, 87–92, 124, 144, 150, 263n2
Nelson, Horatio, 51
Net promoter score, 184
Netflix, 97n*
New business, financing, 10
New York Bank for Savings, 160
New York State Attorney General, 215–217, 265n7
New York Stock Exchange (NYSE), 99, 104
Newcomen Society, 73
Newhall, Daniel W., 92–93, 95, 264n6
Newman, Harold, 144
Nikko Securities, 170
Nixon, Richard, 263n2
Norris, Jim, 178
Novick, Barbara, 224
Nuveen, 267n1
NYSE (New York Stock Exchange), 99, 104
Odd, David, 88
Ogilvy, David, 240
Ohio State Teachers’ Retirement Funds, 146
Olympic athletes, 240
Operations Group, Vanguard, 122–124
Optimizer (program), 97
Organizational excellence, 240–243
OTC Fund, 146
Pace Center for Civic Engagement, 12
Pacific Stock Index, 105
Paine, Stephen D., 24, 25, 31, 38
Partnership Plan, 85–86, 119, 125, 129
Partnerships:
with Ant group, 235–236
with HarbourVest Partners, 192–194
with Infosys, 194–195
limited liability, 154, 266n10
PAS (Personal Advisor Service), xiii, 205–208
Passive investing, 217
“Passive Investing Is Worse than Marxism” (Fraser-Jenkins), 225
Peat, Marwick, Mitchell & Company, 15
Pension Benefit Guaranty Corporation, 122–123
Pension funds, 22, 24, 32, 37, 57, 62, 112
Pensions & Investments, 97
Performance:
of active managers, 92–94
of index vs. active funds, 108
Performance reviews, 167
Performance-linked compensation, 219
Personal Advisor Service (PAS), xiii, 205–208
Personal growth, 254
Personal lives, of leaders, 164–165, 252
Personal Trust Service, 205
Personalized advice, 199–200, 207
Philadelphia, Pa., 15, 17, 22, 28, 29, 33, 262n1
Philadelphia Bulletin, 7
Philadelphia Enquirer, 132
Philadelphia National Bank, 16
Plain vanilla asset management, 67
Planning and Development Group, 106
Plaza Hotel (New York City), 73–74
Policy Holders’ Alliance, 3
Porter, Michael, 161
Precious Metals Fund, 228
Price–earnings ratio (P/E), stocks with low, 90–91
Prime Money Market fund, 66
Primecap Management Company, x, 97–100, 119, 124
Princeton University, x, 7–8, 12–14
Private equity, 192–194, 267n4
Privatization, of Wellington, 153–155
The Problem of Twelve, 224
Professional development, 166
Professional growth, 254
Profit-sharing (see Partnership Plan)
Promotion decisions, 166
Prudent man rule, 154
Prudential, 121
Pull marketing, 64
Push marketing, 64
Qatar, 173
Quality–cost paradox, 163, 250
Quantitative Equity Group (QEG), 95, 105
Radnor, Penn., youth lacrosse team, 157–158
Rampulla, Tom, 208
Rankin, Alfred, 175
Raskin, Sarah Bloom, 192
RDR (Retail Distribution Review), 186
Read, Dillon, 154
Reed, Glenn, 130, 170–172, 174–175
Referrals, employee, 182–183
Regansteiner, Max, 65
Registered Investment Advisors (RIAs), 110–111, 113, 174, 207
Regulatory compliance, 215
Relationship building, with investors, 210, 237
Relationship executives, 125
Resourcefulness, 252–253
Retail distribution of mutual funds, 32–33, 48, 50
Retail Distribution Review (RDR), 186
Retail Division, Vanguard, 216–217
Retail index funds, 58–60
Retail Investors Group, Vanguard, 122, 125–126, 191, 216–217
Retention, 82–83
Retirement planning, 199–200, 205
Retirement policy, 119, 132–134
Returns:
augmented, 79–81
fees as percent of, 74
Reynolds & Co., 64
RIAs (see Registered Investment Advisors)
Riepe, Jim:
in Bogle’s war with Wellington, 43, 45, 48–51
departure from Vanguard, 118
early days of Vanguard for, 56, 60, 70, 226, 227
mandatory retirement policy set by, 119, 132
recruitment by, 67
Right thing, doing the, 162–163, 227–228, 249
Riley, Ivers, 245
Risk, oversight of, 218–219
Robbins, Sydney, 88
Robertson, Julian, 151
Root, Charles, x, 34–37, 42, 46, 47, 51
Rum Rebellion, 50n*
Russia, 56
Russian debt crisis, 110
Salespeople, 122–125
Sanger, Hazel, 150
Sanitary Can Company, 4
Sants, Hector, 173
Sarbanes-Oxley Act (2002), 221
Satterthwaite, Frank, 216
Sauter, Gus, x, 78–81, 96–97, 101, 104–113, 130, 181, 182, 216, 264–265n2
Savings Bank Life Insurance Co., 159
S.C. Johnson & Son, 84–85, 160
Scalvino, Pauline, 216
Schow, Howard, 97–100
Schreyer, Bill, 170
Schwab, 184
Scudder, Stevens & Clark, 63
Sector Spiders, 245–246
Sector teams, at Wellington, 152
Securities and Exchange Commission (SEC), 36, 262n7, 263n12, 265n4
actively-managed ETF authorization by, 245
Alliance Capital investigation by, 143–144
on communication with investors, 229
First Index Investment Trust filing with, 59
fund board consolidation approval by, 50
index funds and trading regulations of, 58
information sharing requirements of, 77
mutual fund ETF approval by, 111
no-load fund approval by, 65
OTC Fund approval by, 146
privatization challenges by, 153
Vanguard’s alignment with, 213–216
Securities lending, 79
Securities Regulation team, Vanguard, 216
Security Analysis (Graham and Odd), 88
Self-deprecation, 138
Self-interest, 253
Senior management, board and, 192
Servant leadership, 120–121
Service culture, 125
Service providers, changing, 79–80
Shad, John, 58
Share repurchase program, 153
Shareholder(s):
putting shareholders first, 9–10
Vanguard’s behavior as, 220–221
Sharpe, William, 205
Sheridan, Robert, 159
Sherrerd, John J. F. “Jay,” 20, 27
Short termism, 224
SIFIs (systemically important financial institutions), 229
Singapore, 150
“The 6 Percent Solution,” 18
Six Sigma, 130
Skip-level meetings, 131
Smith, Edgar Lawrence, 80
Smith, Richard B., 36–37
Snyder, Ted, 80
Soft-dollar relationships, 57, 63
South America, 56
S&P 500 Index Fund, 58, 79–81, 106
S&P Dow Jones Indices, xii
SPDRs (Standard & Poor’s Depositary Receipts), 112, 245
Speculative investing, 95
Spitzer, Eliot, 215–217
Stam, Heidi, 127, 130, 213–217
Standard & Poor’s 500 Index, 99
board diversity of companies in, 220
Bogle’s index fund replicating, 58, 59, 61, 62
Capital Opportunity Fund returns vs., 100
ETFs designed to track, 112, 245
Health Care Portfolio returns vs., 228
Ivest Fund returns vs., 24
private equity returns vs., 194
during tech bubble, 107
Tesla’s joining of, 103–104
Windsor Fund returns vs., 87, 89
Standard & Poor’s Depositary Receipts (SPDRs), 112, 245
State Street Bank, 10, 58n*, 121, 265n4
State Street Global Advisors, 174, 245–246
State Street Research & Management, 145, 266n1
Stategic Equity, 96
Stock Market Crash (1987), 104–105, 110
Stock-based compensation, 219–220
Strategic engagement, 221
Strategy, oversight of, 218–219
Subadvisor relationships, 146–147
Subprime mortgage-backed securities, 215
Succession, 253
Sunoco, 268n4
“Swiss Army” program, 78–79, 119
Switzerland, 26
Sydney, Australia, 150
Systemically important financial institutions (SIFIs), 229
T. Rowe Price, 63, 118, 123, 227
Taiwan, 236
Target date funds, 204–205
Target Retirement Funds, 101, 201, 203–205
TDP&L (see Thorndike, Doran, Paine & Lewis)
Teaching, 254
Teamwork, 119, 160, 163, 177, 250
Tech bubble (1999-2002), 95, 107
Technivest Fund, 30
Technology, 71, 78, 92, 118, 121, 133, 194–195, 206–207
Technology Division, Vanguard, 128, 191
Temple University, 268n5
Tesla, 103–104
Thomas, Landon, Jr., 187
Thorndike, Doran, Paine & Lewis (TDP&L), 23–43, 69–70, 98, 149, 150
Thorndike, W. Nicholas “Nick,” 24, 25, 27–29, 33–35, 37–41, 43, 45, 46, 150, 153
Times-Union, 177
Tokyo, Japan, 150
Topic-driven proxy voting, 221
Toronto Index Participation Shares, 245
Toronto Stock Exchange, 245
Total Bond Market Index Fund, 231
Total International Stock Index, 105
Total Stock Market Index Fund, 105–106
Tracking error, 102
Trading fees, 50
Trading flexibility, with ETFs, 246
Trading frequency, 216–217
Trading mandates, 103–104
Training, for organizational excellence, 242
Transaction fees and costs, 74, 91, 101–102, 227
Treasury securities, 71, 226–227
Tremblay, Gene, 152
Trustees’ Equity Fund, 30
TSE 35 Index, 245
TSE 100 Index, 245
12b-1 fee, 65
UBS, 195
Umbrella culture, 151–153
Undervalued stocks, 90
Union Warren Savings Bank, 158
University of Chicago, 80–81
University of Massachusetts, 159
University of Notre Dame, 159, 191
University of Pennsylvania, 191, 264n1
University of Toledo, 88
University of Virginia, 161
Unmatchable Excellence, 130
U.S. Financial Stability Oversight Council, 229
Value Index, 105
Values-based organizations, 213
Vanguard:
active management and indexing at, 77
blue water strategy of, 70–71
Bogle’s legacy at, 137–139
business development strategy of, 121–123
competitive strengths of, 190
culture of, 165–167
early strategies of, 55–65
employee referrals at, 182–183
first employees at, 67–70
foundational principles of, 9–10
incorporation of, 51
index investing objectives of, 101–103
innovation at, 70–71
management of active managers at, 95–96
mutual funds managed by Wellington with, 146–147
organizational excellence of, 240–243
strategic financial power of, 233–235
Vanguard (term), 51
Vanguard 500 Index Fund, 81, 104
Vanguard Asset Management Services, 206
Vanguard Effect, 214
Vanguard ETF, 112
Vanguard Experiment strategy, 55–56
Vanguard Financial Planning (VFP), 205
Vanguard flywheel concept, 183–185, 206–207, 233–235
Vanguard Group, Inc., 171
Vanguard Investors’ Forum, 132
Vanguard Small Cap Index Fund, 105
Vanguard Total Stock Market ETF, 246
“Vanguarding” (term), 182
Vertin, James R., 170
VFP (Vanguard Financial Planning), 205
Villanova University, 268n4
Viper ETFs, 111–112
Visa, 195
Volanakis, Peter, 191
Volcker, Paul, 66
W. L. Morgan Growth Fund, 30, 96
Wall Street Journal, 81, 91, 170, 226
Walters, James L. “Jim,” 36, 153–154, 262n7
Warwick Municipal Bond Fund, 65–66
Washington Post, 82
WEBS (World Equity Benchmark Shares), 245
Welch, Joseph E., 13, 20, 28, 34–35, 47
Wellesley, Arthur (Duke of Wellington), 17, 51
Wellesley Income Fund, 31
Wellington Capital Management, 145–146
Wellington Equity Fund, 89 (See also Windsor Fund)
Wellington Fund, 17–18, 20, 21, 29–30, 63, 145
Wellington Group of Funds, 40, 45–51, 55, 64
Wellington Management Company, x, 9, 265n7
Bogle’s departure from, 29–43
core values of, 70
culture at, 70, 145, 146, 149–153
limited liability partnership, 154, 266n10
mutual funds managed by Vanguard with, 146–147
no-load funds at, 62–64
partnership of Vanguard and, 143, 148–151
privatization of, 153–155
relationship with Vanguard, under Bogle, 143–146
TDP&L merger with, 23–31, 69–70, 98
Vanguard’s early dependence on, 55, 62, 66, 68
Wellington Group’s split from, 45–51
Wells Fargo Bank, 170
Wells Fargo Investment Advisors, 58n*, 170
Wentworth Institute, 158
Westminster Bond Fund, 31
Wharton School, 178
What it Takes (Ellis), 149n*, 243
Whiffenpoofs, 149
Wilkins, Alvin J., 17
Williams College, 264n6
Wilshire 4500 Extended Market Index, 105
Wilson, J. Lawrence, 127
Wilson, Joseph C., 99
Windsor Fund, 20, 30, 69, 87–91, 124
Worden, Robert E., 34, 46, 262n4
World Equity Benchmark Shares (WEBS), 245
World II, 17
Yale University, 145
Yankee Stadium, 173
Zweig, Jason, 139