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The Vanguard Group, Inc.

PRI reporting framework 2017

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Basic Information

OO 01. Signatory category and services

01.1. Select the services you offer.

% of assets under management (AUM) in ranges

% of assets under management (AUM) in ranges

01.2. Additional information. [Optional]

Vanguard is one of the world's largest global investment companies, offering a wide selection of low-cost index and actively managed mutual funds and ETFs, along with advice and other investment-related services. We offer our products and services directly to individuals, as well as to financial professionals and to corporate and institutional investors.

What sets Vanguard apart---and lets us put investors first around the world---is our ownership structure in the United States. Rather than being publicly traded or owned by a small group of individuals, The Vanguard Group, Inc. (VGI), is owned by Vanguard's US-domiciled funds and ETFs. Those funds, in turn, are owned by their investors.

This unique mutual structure aligns our interests with those of our investors and drives our culture, philosophy, and policies throughout the Vanguard organization globally. As a result, investors around the world benefit from Vanguard's stability and experience, low costs, and client focus, as the following describes in more detail:

Stability and experience: Vanguard does not pursue short-term asset growth at the expense of existing investors’ interests. For us, asset growth is not a goal; it is a by-product of doing the right thing for investors. Vanguard established the world's first index mutual fund for individual investors in 1976 and has been a leader in low-cost index investing ever since. Vanguard also launched the first funds based on bond and international indexes and, over the last decade, has extended its index management expertise to ETFs. Vanguard leverages the scale, experience, and resources of our established global business.

Low costs: Investors can't control the markets, but they can control the costs of investing. Providing low-cost investments isn't a pricing strategy for Vanguard---it’s how we do business. We are able to keep costs low because of our unique ownership structure in the United States, which allows us to return profits to investors through lower expenses. Vanguard's scale also helps keep costs low. As our assets under management increase globally, we are able to reduce expense ratios for the investors in our funds.

Client focus: VGI's ownership structure aligns our interests with those of our clients. Because Vanguard is not publicly traded, we can extend the benefits of that structure to our clients around the world. Vanguard's unique corporate structure in the United States allows us to manage our US-domiciled funds at cost, giving clients the opportunity to receive the best value. Clients come first because clients can come first.

Note: The data included in this section have not been audited by an independent third party. 


OO 02. Headquarters and operational countries

02.1. Select the location of your organisation’s headquarters.

United States

02.2. Indicate the number of countries in which you have offices (including your headquarters).

02.3. Indicate the approximate number of staff in your organisation in full-time equivalents (FTE).

15000 FTE

02.4. Additional information. [Optional]

As a global enterprise, Vanguard focuses on helping our clients reach their financial goals by being one of the world's highest-value providers of investment products and services. We are guided by our mission: "To take a stand for all investors, to treat them fairly, and to give them the best chance for investment success."

Since our founding in 1975, we have followed the time-tested investment principles of balance, diversification, cost efficiency, and a disciplined focus on the long term. We're gratified that our long-standing advocacy for these principles has helped change the world of investing.

We serve clients across a range of channels, including individual investors, financial advisers, and institutions. Our approach in each market is tailored to suit local cultural and regulatory factors, but it always makes full use of the scale and experience of the broader enterprise and reflects Vanguard's beliefs and client focus. We continue to adapt and expand our investment products for institutional and retail investors around the globe, ensuring that the products are grounded in our enduring principles. By engaging in continuous dialogue with clients, we uncover their needs and expectations and refine our capabilities to meet them.

The success of our approach has allowed Vanguard to expand rapidly. We now have operations in 16 locations, 12 of them outside the United States. Internationally, we continue to grow in Europe, the Americas (ex-US), Australia, and in the Pacific regions. We are strengthening our global operations further by expanding our resources in portfolio management, research, and client services across the regions served by our 16 offices.

A commitment to responsible investment has always been inherent in Vanguard's investment process. Our unique mutual structure mandates our adherence to the values of integrity, focus, and stewardship---values that are consistent with being responsive to environmental, social, and governance (ESG) concerns. As global markets and their associated risks evolve, Vanguard will continue to deepen its engagement in analysing and managing ESG risks in our investments on behalf of our clients.

Note: The data included in this section have not been audited by an independent third party. 


OO 03. Subsidiaries that are separate PRI signatories

03.1. Indicate whether you have subsidiaries within your organisation that are also PRI signatories in their own right.

03.3. Additional information. [Optional]

Our report covers the investment management activities of all Vanguard subsidiaries, including Vanguard Investments Australia and Vanguard Asset Management.


OO 04. Reporting year and AUM

04.1. Indicate the year end date for your reporting year.

31/12/2016

04.2. Indicate your total AUM at the end of your reporting year, excluding subsidiaries you have chosen not to report on.

Total AUM
trillions billions millions thousands hundreds
Currency
Assets in USD
trillions billions millions thousands hundreds

04.4. Additional information. [Optional]

Note: The data included in this section have not been audited by an independent third party. 


OO 06. How would you like to disclose your asset class mix

New selection options have been added to this indicator. Please review your prefilled responses carefully.

06.1. How you would like to disclose your asset class mix.

Internally managed (%)
Externally managed (%)

 

Listed equity >50% 58.3 10-50% 10.27
Fixed income 10-50% 26.9 <10% 3.13
Private equity 0 0 <10% 0.01
Property 0 0 0 0
Infrastructure 0 0 0 0
Commodities 0 0 0 0
Hedge funds 0 0 0 0
Forestry 0 0 0 0
Farmland 0 0 0 0
Inclusive finance 0 0 0 0
Cash <10% 0.16 0 0
Other (1), specify <10% 0.85 <10% 0.07
Other (2), specify <10% 0.3 0 0

'Other (1)' specified

          Repurchase Agreements
        

'Other (2)' specified

          Derivatives
        

06.2. Publish our asset class mix as per attached image [Optional].

06.3. Provide contextual information on your AUM asset class split. [Optional]

Vanguard offers global investors a wide range of actively and passively managed equity, fixed income, and alternative strategies, primarily via mutual funds, to help them meet their financial goals. Our investment products and related services benefit from the skill and experience of our own professionals along with the specialised talents of our external managers, whom we select and oversee.

Vanguard is a trusted, long-standing leader in index investing. We established the first retail index fund in the United States in 1976. Today, more than two-thirds of our USD $3.93 trillion in total assets (as of December 31, 2016) are managed in index strategies. We also offer many actively managed funds across the investment spectrum.

Note: The data included in this section have not been audited by an independent third party. 


OO 07. Fixed income AUM breakdown

07.1. Provide to the nearest 5% the percentage breakdown of your Fixed Income AUM at the end of your reporting year, using the following categories.

Internally managed
60 SSA
10 Corporate (financial)
20 Corporate (non-financial)
10 Securitised
Total 100%
Externally managed
15 SSA
15 Corporate (financial)
45 Corporate (non-financial)
25 Securitised
Total 100%

OO 08. Segregated mandates or pooled funds

New selection options have been added to this indicator. Please review your prefilled responses carefully.

08.1. Provide a breakdown of your organisation’s externally managed assets between segregated mandates and pooled funds.

Asset class breakdown
Segregated mandate(s)
Pooled fund(s)
[a] Listed equity
[b] Fixed income - SSA
[c] Fixed income – Corporate (financial)
[d] Fixed income – Corporate (non-financial)
[e] Fixed income – Securitised
[f] Private equity
[o] Other (1), specify
Total externally managed assets
Please ensure the entire table
(both columns combined)
totals to 100%

08.2. Additional information. [Optional]

Note: The data included in this section have not been audited by an independent third party. 


OO 09. Breakdown of AUM by market

09.1. Indicate the breakdown of your organisation’s AUM by market.

 

 

Developed Markets

 

 

Emerging, Frontier and Other Markets

Total
100%

09.2. Additional information. [Optional]

Note: The data included in this section have not been audited by an independent third party. 


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