Vanguard CEO McNabb to step down

Vanguard Group Chief Executive Officer F. William McNabb will step down at the end of the year and cede his role to Tim Buckley, a two-decade veteran of the world's second-largest money manager who serves as investment chief. McNabb, 60, who became CEO in 2008, will remain chairman, the company said Thursday in a statement. Buckley, 48, will become president immediately and take the CEO role on Jan. 1. Greg Davis, 46, Vanguard's global head of fixed income, replaces Buckley as chief investment officer. "I have been thinking about this transition for a year," McNabb said in a telephone interview. "Almost 10 years in this job is a long time and Tim is so well prepared to take over." Under McNabb, Vanguard more than tripled in size as investors embraced the low-cost index funds for which it is best known. The firm, which oversees $4.4 trillion, attracted $215 billion globally in the first six months of this year after collecting a record $323 billion in 2016. (More: For Vanguard, a tsunami of money means more employees and lower fees) Buckley will be Vanguard's fourth CEO since it was founded by John Bogle in 1975. Bogle created a firm that is owned by the shareholders in its funds and regularly passes on cost savings to those customers in the form of lower fees. Bogle, 88, stepped down as CEO in 1996, but remains a vocal champion of the low-cost investing he pioneered. Vanguard has forced rivals to cut their fees and spurred others to offer cheaper indexed funds. BlackRock Inc., Fidelity Investments and Charles Schwab Corp. offer similar products today at prices as low and sometimes lower than Vanguard's. "I love that everyone is following us," Buckley said in a telephone interview. "We are here to change the way people invest and we are taking that beyond the borders of any one country." The vast majority of Vanguard's assets are in the U.S., but the firm is wagering that lower costs and indexing will become more popular globally over the next decade. McNabb joined Vanguard in 1986. Buckley, who has a bachelor's degree and a master's in business administration from Harvard, started at Vanguard in 1991 as Bogle's assistant. He has served as the firm's chief information officer, head of the information technology division and head of the retail investor group. Davis, who has been with Vanguard since 1999, has led the fixed-income group since 2014.