Has Vanguard become Number 1 in the mutual fund industry

1
THE VANGUARD GROUP

• Has Vanguard become Number 1 in the mutual fund
  industry ?
• Has it increased its advertising expenditures ?
• Has Brennan made any substantial changes ?

2
Has Vanguard become Number 1 in the mutual fund
industry? (1)

• Vanguard does not have the largest fund
• Dec 3, 2001 - Wall Street Journal How the
  Largest Funds Fared
• Fidelity Magellan has
• 73,285.5 M in assets
• Vanguard 500 Index Inv has
• 67,359.2 M in assets
• Fidelity Magellan is 5,926.3 M (8.8) larger

3
Has Vanguard become Number 1 in the mutual fund
industry? (2)

• Vanguard does not have most assets under
  management (9/30/01 company fact sheets)
• Fidelity Investments Corp has
• 751.3 B in total mutual fund assets
• The Vanguard Group has
• 534.0 B total mutual fund assets
• Fidelity Investments is 217.3 B (41) larger

4
Has Vanguard Increased its Advertising
Expenditures?

• YES Vanguard advertises regularly in the Wall
  Street Journal (WSJ 10/3/01 Mutual Fund
  Section, p. R6, variable annuities)
• YES Vanguard is an advertiser in the Harvard
  Business Review On-Line Media Kit
• YES Vanguards advertising agency is SVGT with
  print ads and radio spots!
• YES Vanguard has full-page ads in the Financial
  Advisor Magazine

5
Has Brennan made any substantial changes? (N)

• Things that have not changed since Bogle
• Still mutual organization and still very low
  fees
• Magellan 0.89 3 redemption
• Vanguard 500 0.20 (Inv) OR- 0.15 (Adm)
• Still have lots of index funds and lots of
  outsourced active funds
• Continuing efforts in metrics (since 1996)
• Vanguard Economic Value Added (VEVA)
• market- adjusted expense ratio
• Informative web site and phone system

6
Has Brennan made any substantial changes? (Y)

• Things that have changed since Bogle
• Focus on big individual investors
• Admiral Shares (reduced fees for big investors)
• Flagship (250 K to 1 M) Voyager ( 1 M)
• VIPER Shares Vanguard Brokerage
• Plenty of new funds (e.g. double the
  Institutional funds)
• Lots of new advisory and web services
• AwardS Best Corporate University best place to
  work (Working Mothers Pennsylvania)