While the steady growth of Malvern’s Vanguard is usually associated with its low costs, there are many other unique factors that keep it at the top, writes Barry Ritholtz for Bloomberg.

The firm’s philosophy is based on the three core beliefs set out four decades ago by founder Jack Bogle. First, the clients’ interest is principal to the firm. By making the investors the firm’s owners, Vanguard removed any conflict of interest, as well as the fiduciary obligation to maximize profits for shareholders.

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Second, by setting low costs, the company allows clients to retain more of their gains. And third, the emphasis on indexing helps mitigate self-destructive investor behavior.

Another factor in Vanguard’s favor was building the company’s headquarters in a Philadelphia suburb to contain costs instead of opting for a flashy office somewhere else.

Also, its balanced approach to both investing and business life is a huge advantage. The absence of giant bonuses for executives, outside salaries, or massive stock grants ensures that the majority of media coverage is positive, helping the firm maintain its stellar reputation.

Read more about Vanguard’s strengths at Bloomberg here, and check out previous VISTA Today coverage of Vanguard here.

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