Photograph by John Henley

    For America’s middle class, many of retirement’s financial building blocks have crumbled. Social Security and home equity look unreliable; pensions have nearly vanished. In their stead, 52 million savers rely on “self-directed” pension plans like 401(k)s, where expenses can siphon away tens of thousands of dollars over a lifetime. No institution has done more to combat those costs than Vanguard, the champion of index investing. By matching rather than trying to beat the market, index funds keep expenses low (Vanguard’s average 0.18% annually). That in turn pressures competitors to lower their costs or justify high expenses with stellar returns (a bar that few clear). U.S. investors now hold roughly $4 trillion in index and exchange-traded funds. Not coincidentally, average stock-fund expenses have declined 29% since 2004.

    Company Info

    IndustryAsset Management
    Revenues ($ millions)-
    Company typePrivate
    CEOFrederick W. McNabb III
    Impact SegmentEconomic Opportunity/Financial Inclusion

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