As many asset managers push into new asset classes and strategies, Vanguard Group CEO Salim Ramji says that the firm’s emphasis on expenses is the most advantageous for investors.
“We believe that to lower cost drives up quality, which goes against some of the orthodoxy today,” he said Friday at the 2025 Bogleheads Investing Conference in San Antonio.
When it comes to “how to [further] lower costs and improve quality, there’s so much room to grow and expand,” according to Ramji. That’s because there are “many other pockets of the investing universe where high costs and complexity dominate.”
Along with being the first outsider to lead Vanguard, after joining it last year from BlackRock, Ramji is the first acting leader of Vanguard to speak at a national Bogleheads gathering. The investor-focused event has been staged by the John C. Bogle Center for Financial Literacy since 2000.
This year’s event drew about 600 investors from across the United States, with many sessions led by Christine Benz, director of personal finance and retirement planning at Morningstar, and Rick Ferri, founder and CEO of Ferri Investment Solutions.
Fifty years ago, Vanguard’s S&P 500 fund had a fee of 43 basis points, according to Ramji. Now this type of fund charges just 3 basis points.
“In the next five years, we see opportunities in fixed income, savings accounts and CDs that could be good for the Vanguard effect,” he said.
But, as the CEO discussed, Vanguard isn’t shying away from some new asset classes. In April, it began working with Wellington Management and Blackstone on a public/private markets fund — which aims to allocate 25% to 40% of a portfolio to private markets, 40% to 60% to stocks via Vanguard funds and 15% to 30% to Vanguard actively managed bond funds, according to Independent Vanguard Adviser.
“We are looking and researching” in this area of private and other alternative investments, Ramji said, “… to see if it can it enhance a 60-40 portfolio. Most things do not and are overly complicated.”
For some investors, having investment-grade private credit CDs might make sense, for instance, he says. While there are “many caveats” to investing in private assets, Ramji noted that Vanguard has being buying institutional funds and related investments for clients since 1975.
While he doesn’t advocate adding such assets to average investor’s target date fund, “It depends on what the clients want.” Such funds “work well for 90% of clients now, and in the future, a sub-segment of clients may want private markets. Thus, we’re exploring this. … It’s incumbent on us to stay current.”
Market Views
While U.S. equities have done well for the past 10 years, their current trading level “looks like 2000 … with very high valuations,” Ramji said.
“If you think we’re at the start of a [new] industrial revolution with massive growth head, then you could be totally fine,” he said, adding that the “best approach is to have a well-balanced portfolio.”
He’s bullish on bonds for the next 10 years, noting that they “have less than half the volatility of stocks.” And for some investors, it might make sense to go to a portfolio with 40% stocks and 60% bonds “given the run-up in U.S. equities.”
Ramji points out that Vanguard has had actively managed bond funds since 1982, and active fixed income exchange-traded funds since 2023. Vanguard founder Jack Bogle supported active management but not with high fees, he says.
“Look at the inefficiencies,” Ramji said.
Some funds in this group were charging 40 or 50 basis points for a few years ago.
“We saw a marketplace place ready for disruption," he said.
When it comes to cryptocurrency and gold-based products, “That’s a no go,” the CEO said.
Vanguard focuses on investments that can deliver cash flows or have prospects to do so over time.
“This is our orthodoxy,” Ramji said.
That approach differs from that of investors who look at other market opportunities, such as returns tied to trading.
Operational Issues
Another focus for the $11 trillion asset manager is resolving customer service issues. That is “No. 1” on the firm’s list, the CEO said.
“We recognized there were issues about four or five years ago and believe the service is now much stronger than it was two years ago,” he said, pointing to its latest strong rankings from J.D. Power. (Vanguard earned the top ranking for DIY Investor Satisfaction in the J.D. Power 2025 U.S. Investor Satisfaction Study, up from third last year.)
He pointed to big growth in its client base — Vanguard serves tens of millions of individual investors globally — as well as “antiquated” technology and past emphasis on efficiency rather than “great service” for its technology investments.
“We’ve now moved 90% of individual investors’ information to cloud," Ramji said.
Funding has risen two to three times for these efforts, Ramji said. “We’re being responsive and staffing up to 2019 levels” in client service … and “making progress.”
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.