Tim Buckley has just been handed the keys to the house that Bogle built.
But Buckley, Vanguard Group’s new president, confronts something that founder Jack Bogle never did back in his prime: a world in which cheap market-tracking index funds are everywhere.
Buckley, 48, was tapped late Thursday to run the world’s second-largest money manager, which oversees $4.4 trillion and is responsible for the savings of more than 20 million investors. He has a Vanguard pedigree. The Harvard MBA joined Vanguard in 1991 as an assistant to Bogle and rose through the ranks, overseeing first its technology operations and then its core retail unit.
Buckley, who becomes chief executive officer in January, succeeds Bill McNabb, who led Vanguard since 2008, weeks before the collapse of Lehman Brothers. Since then, its assets have more than tripled, putting the rest of the industry to shame. Its customers have an almost fanatic loyalty to its flinty founder and his company, named for an 18th-century ship.
“I love that everyone is following us,” Buckley said Thursday. “We are here to change the way people invest and we are taking that beyond the borders of any one country.”
Buckley faces an arguably greater challenge than any of his predecessors: Maintaining its lead in a low-margin business, while big competitors such as giant BlackRock Inc. are fighting back, even undercutting, Vanguard on cost. After all, its best-known products are essentially commodities. An S&P 500 Index fund by Vanguard or one of its competitors is tracking the same basket of stocks.