Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.
On this day 44 years ago, the Vanguard Group of Investment Companies began its operations.
Where The Market Was
The Dow finished the day at 830.96. The S&P 500 traded at 88.10. Today, the Dow is trading at 26,592 and the S&P 500 is trading at 2,945.
What Else Was Going On In The World?
In 1975, the Vietnam War officially came to an end after Saigon fell to the North Vietnamese. The blockbuster movie “Jaws” dominated the U.S. box office. The average cost of a new car was $4,250.
The Vanguard Story Begins
Vanguard was formed in 1975 after founder Jack Bogle envisioned a new type of mutual fund company that could be owned by its clients and operated with their best interest in mind.
As Vanguard grew, Bogle wanted to redirect net profits into lowering costs for Vanguard’s clients, in the same way a credit union historically worked. Vanguard soon opened the first ever index mutual fund, and the company became wildly successful, enabling it to lower costs even further.
From 1975 to 1990, Vanguard’s asset-weighted average fund expense ratio declined from 0.68 percent to just 0.35 percent. By 2017, that expense ratio had shrunk to just 0.11 percent.
Vanguard started with just $1.7 billion in assets under management in 1975, but it now has a mind-boggling $5.1 trillion in assets.
Photo credit: “Bogle: Vanguard’s Size a Worry“
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