MiB: Bill McNabb, Vanguard Group

This week, our Masters in Business radio podcast, we speak with Bill McNabb, chief executive officer and chairman of Vanguard Group. McNabb is one of our few repeat guests; you can hear the prior conversation here. He just finished serving as chairman of the Investment Company Institute (ICI). Vanguard now has about $4 trillion in assets under management; about two thirds of that is passively indexed, the rest are actively managed.  The index fund, created by Vanguard founder Jack Bogle, just celebrated its 40th anniversary.

We discuss the cost aspect of investment management, not only on the passive side of indexing, but how that applies to active management. The economies of scale that Vanguard, Blackrock, State Street, and other firms get to spread their cost structure over very large asset base. We also chat about the role of the technology and how it impacts pricing.

Corporate governance issues and questions of ESG (Environmental Sustainability and Governance) investing is a new focus of Vanguard; they created a FTSE based ESG fund, and expect to have more ESH type funds in the near future. Short term versus long term focus, as well as activist shareholders are similarly looked at.

We also geek out on sci-fi writers in the podcast portion of the conversation (all books discussed after the jump).

You can hear the full interview, including our podcast extras, at iTunesSoundcloud and Bloomberg. All of our earlier podcasts can be found at iTunesSoundcloud and Bloomberg. (Please send your suggestions for future topics to MIBPodcast at Bloomberg dot net).

Next week, we speak with Aswath Damodaran from NYU.

 

 

 

Bill McNabb’s Books

 

Winning the Loser’s Game, 6th edition: Timeless Strategies for Successful Investing

 

A Random Walk down Wall Street: The Time-tested Strategy for Successful Investing

 

Bailout Nation, with New Post-Crisis Update: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy

 

The Lost Bank: The Story of Washington Mutual-The Biggest Bank Failure in American History

 

This Immortal

 

The Wright Brothers

 

Valiant Ambition: George Washington, Benedict Arnold, and the Fate of the American Revolution

 

Mona Lisa Overdrive

 

Neuromancer

 

Hyperion

 

Dune, 40th Anniversary Edition

 

Seveneves

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  1. Technology & Scale in Asset Management commented on Oct 26

    […] The entire podcast is worth a listen for more about Vanguard’s success and their values: MiB: Bill McNabb, Vanguard Group […]

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