About Vanguard: Structure and governance
TL;DR
Only investor-owned fund company: 0.66% expense ratio (1975) → 0.07% today via mutual structure eliminating profit extraction.
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Documents the only mutual ownership structure in the American fund industry—a structural innovation that eliminated the principal-agent conflict between fund shareholders and company shareholders, drove expense ratios down 90% over five decades, and forced industry-wide fee compression through competitive pressure.
Key Findings from Vanguard (2024)
- Vanguard is the only investor-owned mutual fund complex in America—funds own the company, shareholders own the funds
- Average expense ratio dropped from 0.66% at founding (1975) to approximately 0.07% today, versus 0.44% industry average
- Over 2,000 expense ratio reductions since 1975, with a 2025 reduction saving investors $350 million annually
- Manages over $9.3 trillion in assets and serves 50+ million investors worldwide
- Largest mutual fund provider globally and second-largest ETF provider after BlackRock's iShares
- The 'Vanguard Effect' drove industry-wide expense ratios from 0.73% (1975) to 0.49% (2023)
- SEC approved the mutual ownership structure in 1981 after founding in 1975