MutualFundWire.com: Vanguard's Profit-Sharing Growth Slows a Bit

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Wednesday, May 6, 2020

Vanguard's Profit-Sharing Growth Slows a Bit

Growth in profit-sharing continues but has slowed a bit at the mutual fund industry's low-cost titan.

Mortimer J. "Tim" Buckley
Vanguard
President, CEO

Yesterday Dan Wiener, publisher of the Independent Adviser for Vanguard Investors newsletter, reported that Vanguard's [profile] 2019 Partnership Plan dividend was $322 per partnership unit. That's a growth rate of 13.6 percent, down from 14.1 percent in 2018 and 16.5 percent in 2017.

Wiener also speculated on how much Jack Bogle (Vanguard's late founder) and Jack Brennan (Bogle's retired successor) would have made from the 2019 dividend if they "were both still in the mix": about $32 million for Bogle, and about $18 million for Brennan.

Vanguard's Partnership Plan dividend is partly based on trailing three-year AUM growth. That figure for 2019 reach 57 percent, compared to a 51 percent increase in the Partnership Plan Dividend over those three years, Wiener noted.

Bogle launched the Partnership Plan dividend in 1984, and it has grown by a factor 93.9 times in 36 years, as Vanguard has grown into the world's biggest mutual fund company by AUM. (That compares to S&P 500 growth by a factor of 41.3.)

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