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By Christine Benz and Bridget B. Hughes, CFA | 03-26-2015 04:00 PM

Vanguard's First-Quarter Scorecard

The fund giant saw an executive-management shuffle, ultra-short-bond fund launch, new lower-touch advisory service, and continued inflow domination.

Christine Benz: Hi, I'm Christine Benz for Morningstar.com. Vanguard engineered some changes at the top in the first quarter of 2015. Joining me to discuss this and other developments at the firm are two of our research analysts who focus on Vanguard, Bridget Hughes and Michael Rawson.

Bridget and Mike, thank you so much for being here.

Bridget Hughes: Thanks, Christine.

Michael Rawson: Thanks.

Benz: So, Bridget, let's start with these changes. Vanguard is doing some shuffling in its top ranks. What drove the changes? What was the catalyst for them?

Hughes: Well, the catalyst is a very reasonable reason to start these changes, and that's two retirements. Two of the senior managers at the firm. Mike Miller is retiring in the middle of the year. He had been in charge of planning and development for Vanguard. And then Paul Heller, who is in charge of their retail group, is retiring at the end of the year. So, you can imagine when you have two senior managers retire that there are a lot of holes. Well, it seems like two holes, but it turns into sort of a ripple effect. And so they have made a number of changes at the higher levels and the middle levels of the organization.

Benz: So, it sounds like these are kind of behind the scenes, not things that investors will necessarily confront in terms of their dealings with the funds. Are there implications, though?

Hughes: Well, this is something that Vanguard has historically done, these rotations of managers. So, it isn't unusual. It happens every maybe year or two. Every couple of years or so, there'll be some shuffling of maybe just one or two people who are making some changes. But in this case, it's six or seven or so who are making changes.

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