Vanguard

**Ben Gilbert** (0:00)
I was telling my wife, I think I'll be able to do bedtime tonight, maybe even dinner, and she was like, whoa, whoa, whoa, don't get ahead of yourself.

**David Rosenthal** (0:07)
Let's not go crazy here.

**Ben Gilbert** (0:10)
How complicated could it be? It's index funds.

**David Rosenthal** (0:12)
And active funds and money market and brokerage and advisory.

**Ben Gilbert** (0:18)
Yeah, yeah, yeah.

**David Rosenthal** (0:19)
But really, it's mostly index funds.

**Ben Gilbert** (0:21)
All right.

**David Rosenthal** (0:22)
Let's do it.

**Ben Gilbert** (0:23)
Let's do it.

**David Rosenthal** (0:23)
Vanguard. Is it you?

**Ben Gilbert** (0:41)
Welcome to the spring 2026 season of Acquired, the podcast about great companies and the stories and playbooks behind them. I'm Ben Gilbert.

**David Rosenthal** (0:49)
I'm David Rosenthal.

**Ben Gilbert** (0:51)
And we are your hosts.
Today's episode is more relevant for you than any other company we have ever covered. For most of you, you have most of your net worth tied up in this company or the copycats who followed.
The company is Vanguard, who effectively created the first index fund for individual investors in 1975 And today is the largest provider of index funds in the United States. They manage over $10 trillion in passive index funds. That means they own an average of almost 10% of every company in the S&P 500 General Motors, Nike, Starbucks, Lockheed Martin, Visa, Apple, you name it. Vanguard is the largest shareholder of most US corporations. And together with the other big index funds like BlackRock, State Street and Fidelity, they own 24% of the entire US stock market.

**David Rosenthal** (1:49)
It's absolutely incredible. And none of those other firms would be in this market or doing it in the same way if it weren't for Vanguard.

**Ben Gilbert** (1:57)
No.

**David Rosenthal** (1:57)
I mean, the impact is just wild. I mean, millions and millions and millions of people have sent their kids to college, bought homes, retired comfortably because of Vanguard and Jack Bogle.

**Ben Gilbert** (2:10)
So Vanguard has an incredibly unique corporate structure. If you are an investor in a Vanguard fund, you own a piece of the firm.
Vanguard is owned exclusively by its customers and it's not publicly traded. It doesn't have outside shareholders of any other kind. Even the CEO doesn't have any equity, except of course, then what he has from investing in the funds, just like me and David and all of you. In many ways, it is a different kind of capitalism. Dare we say communist capitalism.

**David Rosenthal** (2:41)
I like it.

**Ben Gilbert** (2:41)
A company whose products exclusively serve the interests of its customers, and no other shareholders. David, as you've been alluding to, the man behind this idea is a visionary, an iconoclast, and a pedantic stick in the mud who was as disagreeable as he was right, Jack Bogle.

**David Rosenthal** (3:03)
That's great. I could have written it better myself then.

**Ben Gilbert** (3:05)
His story is wild since he didn't start Vanguard until he was 46 years old. You might think it was started idealistically, given the structure we're talking about. And it was, sort of.
But the story is equal parts idealistic as it is vindictive. But what is clear, we all owe Jack a giant thank you. Because of Vanguard's relentless cost-cutting and low fees, Vanguard has saved investors over $500 billion in fees and trading costs since its founding in 1975 And as a recent book, The Bogle Effect argues, Vanguard's actions also forced the hand of the rest of the industry to cut their fees, totaling another $500 billion over time. So Jack Bogle and Vanguard are responsible for a trillion dollars of wealth transfer out of the pockets of Wall Street and the finance industry and into the pockets of individual investors in the form of fees that they didn't have to pay.

**David Rosenthal** (4:01)
Absolutely incredible.

**Ben Gilbert** (4:03)
I was catching up with good friend of the show, Morgan Housel, a couple days ago.

**David Rosenthal** (4:06)
Oh, yeah, of course.

**Ben Gilbert** (4:07)
And his comment to me was, I view Bogle as an undercover philanthropist. And at a trillion or even half a trillion dollars, that would make him the greatest philanthropist of all time.

**David Rosenthal** (4:18)
Wow.
Wow. I love that framing. Yeah. I mean, a large portion of that trillion dollars could easily have flowed into Jack's own wealth. And he made the choice that it didn't.

**Ben Gilbert** (4:28)
Yeah. Maybe. Maybe, David. We'll get into it. So listeners, you can join the email list at acquired.fm slash email. That's where we're going to send out our big takeaways from each episode, past episode corrections, exclusive behind the scenes photos that we find in our research. And it's where you'll get to vote on future episode topics. Plus, David writes a little hint each time about next episode's topics. So come play the guessing game with us at acquired.fm slash email. Come talk about this episode with the whole community in the Slack after you listen. That's acquired.fm slash Slack. And before we dive in, we want to thank our presenting partner, JP. Morgan.