The story of Vanguard Mutual funds company and Low cost Index Funds

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01-May-2021 07:30:00
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The 1st of May each year marks the birth anniversary of an investment company that disrupted way back in 1975 how people invest their savings even today. 

John C Bogle launched Vanguard Mutual Fund company on the 1st of May 1975, with only one goal—to build wealth for its clients. So they adapted the model of a credit union or an insurance company, where the members are also owners, as long as they remain invested.

This company aimed to lower costs and maximise investor profits by reducing distribution and operating costs. 

Vanguard Index Funds - Expense Ratio

The First Vanguard Index Fund

Vanguard launched the first index fund on the 23rd of August, 1976, The First Index Investment Trust, an S&P 500 index fund.

This fund was later renamed as Vanguard 500 Index Fund to indicate the index it tracks. 

John C Bogle, the founder of Vanguard and a staunch advocate of the indexing strategy, had met with severe resistance initially and his fund was mockingly called Bogle’s folly.

John Bogle is also one of the most respected authors on investing.

In his book The Little Book of Common Sense Investing, he explains his simple and most efficient investment strategy for growing wealth over the long term - "Buy and hold, at very low cost, a mutual fund that tracks a broad stock market Index such as the S&P 500"

Today Index funds form the core of a majority of investment portfolios worldwide. 

As of the 31st of January 2021, Vanguard is the world’s largest mutual fund provider and also the second-largest exchange-traded funds(ETF) provider after iShares. 

Vanguard Assets Under management They have more than 30 million investors in about 170 countries and $7.3 trillion in assets under management as of Feb 2021. 

How to Invest in Index funds in the UAE?

You can invest in Index funds through one of the following;

Investment Platforms

  1. Saxo Bank
  2. Interactive Brokers
  3. Stockal

Investment Plan

  1. Zurich Wealth Accumulation Plan - Lump-sum investment plan 
  2. Zurich Legacy - Regular Savings Plan
  3. MetLife - Investor Advantage - Regular and Lump-sum investment plan

As an Independent Financial Advisor, I can help you build your financial plan and a robust investment strategy using low-cost index funds and ETFs.

Arrange a free consultation today to start investing, grow wealth and achieve your financial goals.

Click Here to Schedule an Online Meeting

     

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