With Vanguard marking 30 years in Australia, its former managing director Jeremy Duffield has told Money Management why Australia was its first international outpost and how it changed the market.
Having first launched in the United States, Vanguard opened its office in Australia back in 1996 which was its first international outpost. This was more than 10 years before it launched in the major markets of the United Kingdom and Canada although it established a small Irish-domiciled fund range in 1998 to enter the European market.
Speaking to Money Management, Duffield said it took him seven years to convince the firm to expand offshore and highlighted the strength of the superannuation market as being the clincher for his US employer. Duffield is Australian but had been working for Vanguard in the US for 16 years at the time where he ran its planning and development department.
“It took seven years to convince them to go internationally but I came here on holiday and recognised the enormous opportunity emerging because of superannuation. There was this huge pool of savings with a high degree of certainty that it would keep growing.
“Indexing hardly existed so I knew we could bring the skills to a new market.”
But it is not necessarily an easy start, Duffield said, as it opened a small Melbourne office above a gym.
“I put my hand up to return to Australia and it made me even more passionate about Vanguard being successful here. But it was difficult! I was trying to hire a sales team and people didn’t think that indexing would work so it took a lot of time and education on the benefits of indexing for the idea to take hold.”
However, his US parent was supportive and understanding of the slow uptake, he said, as it had similarly taken founder Jack Bogle around 10 years for indexing to take off in the US.
“Indexing experienced great scepticism in the US too, it met a wall of reluctance and it was the same in Australia.”
Another benefit was that managed funds were extremely expensive at the time with a management fee of 1.95 per cent plus 4 per cent upfront commission. This compares to just 0.18 per cent for its Vanguard MSCI Index International Shares ETF nowadays.
Initially working with institutional investors, the firm started to work with advisers in 2000 but once again it took investor education to gain a foothold in the market.
“Advisers weren’t keen so it took a long time, it was hard for us to understand how the advice market worked, it was very complicated. But as platforms evolved then so did the investment portfolios and it became about low-cost products and using a core/satellite approach. We initially had been pitching a total portfolio approach but it became clear indexing would work better as a satellite.”
Since then, it has retained a presence in the country with 850 employees domestically and a head office in Melbourne. This is a positive sign of the market given other regional offices such as Hong Kong and Singapore have closed.
As for whether indexing would ever ‘take off’ as an investment concept, it has risen from less than 5 per cent of the market to 20 per cent today.
Going forward, developments over the years have included the introduction of ETFs in 2009 where it is now Australia’s largest ETF issuer at $100 billion in assets and Vanguard Super in 2022 which has $6.6 billion in assets under management.
ETF reports regularly cite Vanguard as seeing the most market flows and its Australian Shares Index ETF is the largest in the market at more than $25 billion. In the first half of 2026, inflows to Vanguard ETFs stood at $10.2 billion which was up 52 per cent from $7 billion in the same period a year ago.
Vanguard Super, in particular, was in talks for several years before formally launching and Duffield spent four years as a director until his departure in August 2024. It first discussed it in April 2021 and appointed Michael Lovett as CEO, received APRA approval in August 2022 and finally launched in November 2022.
In its FY25-26 performance, the fund said its Lifecycle option, which the fund said is its default MySuper option for over half of its members, delivered 12.29 per cent for members aged 47 and under.
“Vanguard has made a great difference to everyday investors. We have made low-cost, common-sense products accessible and available to Australian investors, I’m proud of that and of our team for maintaining that strong culture of being client-focused,” Duffield concluded.