Bill McNabb has had an amazing nine-year run leading Vanguard [profile]. And now he's stepping back, while Vanguard continues to be "the most dominant fund company in history".

The Valley Forge, Pennsylvania-based, low cost mutual fund giant revealed yesterday after market close that McNabb, 60, will pass the CEO reins to chief investment officer Tim Buckley, 48, next year. As in Vanguard's previous two CEO transitions, McNabb will stay on as chairman, at least initially.

The Vanguard leadership change has been covered by a host of publications, including: Barron's; Bloomberg, twice; Business Insider; CityWire; CNBC; the Financial Times; Morningstar; Pensions & Investments; Reuters; RIABiz; and the Wall Street Journal.

Buckley, another Vanguard lifer who has held a number of leadership roles at the firm before becoming CIO in 2013, will be the fourth CEO in Vanguard's history, 43 years and counting. Jack Bogle founded the mutually-owned mutual fund shop in 1974 and led it as CEO until 1996. Bogle protege Jack Brennan took over in 1996 and led it as CEO until 2008 when he passed the reins to McNabb.

McNabb states that "it is the right time for a new leader," but beyond that has shared little insight yet into why he's stepping down. The company statement makes no mention of retirement.

McNabb took over in the middle of the financial crisis nine years ago, when Vanguard had about $1.25 trillion in mutual fund AUM and (along with Fidelity and Capital Group's American Funds) was a top-three mutual fund shop by AUM. In 2010 Vanguard became the biggest mutual fund company in the world by AUM, a title it has held ever since. Vanguard now has $4.4 trillion in total AUM, including more than $3.8 trillion in mutual fund (including ETFs) AUM alone as of May 31, 2017. That's more than three times Vanguard's AUM in 2008 and it's nearly three times the mutual fund AUM of the number two, three, and foud mutual fund shops: Capital Group, BlackRock, Fidelity.

Vanguard brought in between $116 billion and $121 billion in net inflows in Q1 2017, compared to the nearly $100 billion total for every other mutual fund firm in the business. Vanguard now brings in $25 billion to $45 billion every month. McNabb is going out while Vanguard is on top, and the good times seem to keep rolling. 

Edited by: Neil Anderson, Managing Editor


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