Tredyffrin Easttown Historical Society
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Source: Winter/Spring 2007 Volume 44 Numbers 1&2, Pages 79–80

The Vanguard Group

Page 79

Illustration from page 79

The headquarters building

The Vanguard company was established by John Bogle in 1975 (see his biography for details of his investment philosophy). John loves sailing and the teamwork that goes along with it. The company's name came from Admiral Horatio Nelson's flagship at the 1798 battle of the Nile against Napoleon's fleet. The company's logo is an image of the ship.

The employees of the company are called “the crew.”

In 1976 Vanguard launched the first indexed mutual fund that tracked the companies constituting the Standard and Poor's 500 Index. The fund started with assets of $11 million and has now grown to be one of the world's largest mutual funds with assets of $110 billion. The company switched to the direct marketing of funds to investors in 1977, eliminating brokers and sales loads.

By 1980 Vanguard employed 200 people, managed $2.4 billion in total net assets, and offered 17 mutual funds. The company was initially located in Wayne, moved to Chesterbrook in 1983, and to its present Malvern location spanning Tredyffrin and East Whiteland Townships in 1993.

Illustration from page 79

Page 80

Illustration from page 80

John Brennan took over as Chief Executive Officer in 1996, a position that he continues to hold. In 2006 the company's in-house fund managers oversaw 57 index-based funds. These funds together with 39 quantitative equity, bond, and money market funds had combined assets of nearly $700 billion, out of the company's total managed 2006 assets of nearly $1 trillion. The funds are held in 19 million customer accounts.

Vanguard weathered the stock market slump in 2002 and did not have to resort to layoffs. It also was not implicated in the mutual fund industry scandals of 2003. Though these two events stalled the group's progress for a time it has since resumed its growth.

The company has never had a large network of local offices. Initially the company served its clients primarily through toll-free phone lines. Now more than 80% of client interactions occur online.

The initial number of employees was 28. This number has now grown to more than 11,000 of whom nearly 9,000 are employed locally. Vanguard is Chester County's largest employer. The company also has offices in Charlotte, North Carolina; Phoenix, Arizona; and in Europe, Japan, Singapore, and Australia.

Looking Forward

Forecasting is always a perilous task, but extrapolation of present trends can show likely directions that the township will develop in the near future.

There is little land left in Tredyffrin for development so redevelopment will be the norm. At the larger scale the redevelopment of the Paoli station and rail yard is slowly moving forward. Plans have also been proposed for a project around Daylesford Station and interest has been shown in the Berwyn Station environs.

On the smaller scale, housing redevelopment will be mainly on the larger lots where splitting or rebuilding is permitted under the zoning codes. There will be continuing problems with storm water management and septic systems in the older developments.

In major redevelopments public-private partnerships will be important as illustrated by the Tredyffrin Library expansion and Paoli Station projects.

These redevelopments will not substantially increase the township tax base. The continual increase in the cost of providing services will cause financial tensions.

The township is likely remain an attractive place to companies, families, and individuals due to its good communications links, quality housing, high quality schooling, and well-educated populace.

(This section is based on an interview with Judy DiFilippo, a member of the Tredyffrin Board of Supervisors since 1990 and its present chairperson.)


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