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PRINT-FRIENDLY VERSION Gus Sauter Chief Investment Officer and Managing Director The Vanguard Group Interviewed on 02/28/2008 Provide an overview of Vanguard: Vanguard is one of the largest mutual fund companies in the world. We have a very broad offering of products and services. We believe strongly in indexing; at the same time we believe that active management can provide a nice complement to an index portfolio. So we offer a spectrum of index funds and a spectrum of actively managed funds. We’re unique in the industry in that we’re mutually owned; that means that we’re owned by our funs themselves. So if you invest in a Vanguard fund, you’re an owner of the fund and indirectly you’re an owner of the Vanguard Group. We do not have stock owned by any other individual directly; because of that structure, we operate for the best interests of our investors an we tend to be the lowest cost provider in the industry because were not generating a profit layer that would be distributed to an external owner. What are the unique benefits of Vanguard ETFs? Vanguard ETFs offer several benefits, first of all, the benefit of indexing itself: low cost, relative predictability through broad diversification, and tax efficiency. In addition to that, we offer expense ratios that are among the lowest in the industry. The final advantage we offer is the structure of our ETFs. They’re actually another share class of our existing mutual funds – or, in this case, a brand new mutual fund; but it’s a multi share class. So you can invest directly through us; or if you prefer the ETF share class you can invest in that; but in either case you’re getting the same fund and there’s a real efficiency from a portfolio management standpoint, the way we do it. How do Vanguard Mega Cap Funds differ from other large ETFs? Our Mega Cap ETFs track what we believe are Best in Class indexes; they’re tracking the MSCI, the large cap indexes, and we think those are the most attractive in that space. They’re broadly diversified to begin with, but no so quite broadly diversified as, say, the S&P 500. They really, really focus on the very large stocks in the marketplace. They’re very low cost, they’re being offered at .13%, 13 basis points. So it’s a very low cost, very tax-efficient way to gain exposure to the marketplace. What kinds of education and planning tools does Vanguard provide to advisers? We provide a wide variety of tools for advisors to utilize. So, first of all, we provide tools that help them run their own business; obviously they’ve got a business to run that’s separate and apart from the functions they provide to their clients – so, running the business on a day to day basis. At the same time, we provide them with a lot of educational tools to interact with their clients. We provide them with surveys that they can send to their clients so they get to understand their clients better and know their clients’ needs better. We provide continuing education credits to advisors. We have conferences and they can earn CE credits by attending our conferences. And then, finally, we provide them with planning tools that help them determine asset allocations to really determine the advice that they’re going to give to the clients. So we want to work with our advisor clients and help them help their own clients. About NYSE 4 ON THE FLOOR: The New York Stock Exchange is proud to produce NYSE 4 ON THE FLOOR, an exclusive web-cast interview program featuring the foremost decision makers, executives and leaders of our time. As the center of global business, the NYSE is in a unique position to bring you unparalleled access to these extraordinary men and women. Now, through NYSE 4 ON THE FLOOR, we are able to share their expert industry perspectives, as well as candid thoughts about issues that affect us all, such as management, communication, learning, growth and professionalism. |
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