Active(ly) charting a global journey

WALKING through Vanguard Group's headquarters in Malvern, Pennsylvania is a lesson in naval history. Paintings of the 18th-century ship that inspired the company's name jostle with seascapes and a framed letter from legendary British admiral Horatio Nelson. Even the campus itself conjures tales of derring-do, with buildings swooping along a shallow curve, as if tracing a galleon from stern to bow.

This maritime heritage is taking on new significance as the US$4.4 trillion US-based firm looks overseas for growth amid the biggest leadership shake-up in almost a decade. Vanguard is pushing into Europe and the Asia-Pacific, but it's de-emphasising the index-tracking products that brought in about 75 per cent of its assets in favour of an armada of actively managed funds, which Europeans tend to prefer. The offerings will still have Vanguard's signature emphasis on low fees, with some undercutting European rivals by more than half.

"We're trying to catch up with what we've already done on the indexing side, to be able to offer low-cost, high-quality, active products to investors on a more global basis," said Greg Davis, the 46-year-old incoming chief investment officer (CIO), during an interview at the company's offices. About US$275 billion of the company's assets lie overseas, yet this equates to less than 10 per cent of Vanguard's overall bulk. And while Vanguard is a household name in the United States, it's a relative newbie compared with Europe's asset-management brands.