Bogle: Vanguard's Size a Worry
Diminishing economies of scale and potential regulatory concerns limits how much bigger Vanguard should become, says founder Jack Bogle.
Christine Benz: We've talked about Vanguard being a big beneficiary of investors recognizing the importance of keeping their costs down. What would be too large for Vanguard, if anything?
Jack Bogle: I'm tempted to say 4.7 trillion. I worry about it. I guess anybody that wrote a book called Enough would worry about it. The economies of scale just can't keep going on much longer. We've only got 12 basis points to go, and let me say it: There's an irreducible minimum, no matter how big you are, just for the fun of it, 8 basis points, cost a lot of money to run this business. We're now talking about a 4 basis point improvement in cost. I just don't think it's worthwhile, hyping and trying to bring in more and more money.