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Investing Specialists

A Chat with Vanguard's Jack Brennan

The family's CEO talks about new index funds, ETFs, and his 91st birthday party.

Vanguard has always done a good job of spelling out what it stands for: namely cheap index funds and low-cost actively managed funds with sober, long-term strategies. It has done such a good job, in fact, that the popular news media (and in turn a lot of investors) are often surprised or flustered when the family tries something new. They wonder how the new funds and initiatives comport with its reputation and whether they signal a break with the past.

Well, the family has tried a lot of new things recently, including expanding its index and exchange-traded fund lineup and making plans for a new market neutral fund. I recently talked with Vanguard chairman and chief executive officer Jack Brennan about these and other recent developments at the family, in the mutual fund business, and in the financial markets. Here's an edited excerpt from our conversation.

Q:In the last year Vanguard has launched new index funds tracking the FTSE All-World ex-U.S. Index, stocks with high dividend yields, long duration bonds for institutional investors, and planned to roll out new mega-cap equity index funds. In what other areas could we see Vanguard launch new index funds: perhaps in the international bond area or international style?