PWM Perspectives provides valuable insights into market dynamics, investment opportunities through Q Wealth, and key financial indicators. We are committed to keeping you informed with timely updates from PWM Private Wealth Counsel and Q Wealth Partners, our partner portfolio management firm.
- In last month’s PWM Perspectives, we discussed some of the wisdom of Jack Bogle, the founder of Vanguard, and his often-quoted advice: “Don’t look for the needle in the haystack. Just buy the haystack.” This month, we aim to expand on this topic and show why Vanguard funds are central to the Q Wealth asset allocation strategy, and achieving broad and cost effective diversification.
- John C. “Jack” Bogle founded Vanguard in 1975 (Happy 50th Birthday, Vanguard!) with a revolutionary idea (one that he originally developed in his Princeton University thesis): that investors could achieve better long-term results by minimizing costs and owning the entire market through index funds.
- His philosophy was simple but powerful—keep fees low, stay diversified, and invest for the long term. From a 30,000-foot view in terms of portfolio management, asset allocation, and even elements of Q Wealth’s “pension-style approach” to portfolio construction, we couldn’t agree more with Jack’s fundamentals.
- Vanguard’s structure is unique in the investment world. The investment company itself is owned by its funds, which in turn are owned by the investors in those funds. This “mutual” ownership model means Vanguard operates at cost—there are no outside shareholders demanding profits. As a result, Vanguard can consistently offer some of the lowest fees in the industry.
https://corporate.vanguard.com/content/corporatesite/us/en/corp/articles/of-investor-by-investor-for-investor-since-1975.html
- And Vanguard driving its fees lower helps drivecompetition, which means lower fees at other third-party investment firms(including some used by Q Wealth, such as Global X with sector and thematicETFs).
- Vanguard’s average expense ratio across itsfunds is approximately 0.09%, compared to the industry average of around 0.45%.That difference means more of your money stays invested and working for you.
- One of the most widely held Vanguard funds isthe Vanguard S&P 500 ETF (VOO), which tracks the performance of the 500largest U.S. companies. As of this monthly memo, VOO is the largest S&P 500ETF in the world, with over $1 trillion in assets under management. It’s acornerstone of passive investing and a testament to the popularity of Bogle’svision
https://www.economist.com/finance-and-economics/2025/07/03/vanguard-will-soon-crush-fees-for-even-more-investors
- To achieve similar asset exposure and manage currency risk, Q Wealth uses the TSX-listed, CAD-hedged version of VOO. This enables Q Wealth clients to access the U.S. stock market while reducing currency risk. Currency fluctuations can increase volatility in returns, and VSP helps smooth that impact, especially for clients investing with Canadian dollars.
- As of 2025, Vanguard manages over $10 trillion worldwide, making it one of the largest asset managers globally. Despite its size, it stays true to its founding principles: low costs, broad diversification, and long-term discipline. These values closely align with the investment philosophy at Q Wealth Partners.
- Last month, we discussed S&P 500 concentration and how the largest technology companies continue to increase their market share. As Bogle said, “The winning formula is owning the entire stock market and then doing nothing. Just stay the course.” However, we’ve been witnessing more market highs, although there was some volatility in August around those peaks. Some might ask, what does it historically mean to continue investing at market highs? Is there an increased risk?
- To illustrate this, we have data showing investments made at “market tops” in the S&P 500. Despite starting at market highs, the S&P 500 has historically shown a strong recovery over time. As shown in the chart below, investing at the peak of the last 11 bull markets would still have resulted in an average 8.5% annualized gain so far. The data demonstrates that, even with less-than-ideal entry points, the S&P 500 has traditionally delivered positive annualized returns.
- Your Q Wealth investment team, including Portfolio Managers, Kevin Hegedus and Andrew Rodych, and Chief Investment Officer, Larry Berman, continue to monitor markets and economic conditions, adjust asset allocations as needed to maintain portfolio risk mandates, and look for opportunities across asset classes. But at the core of the strategy is a belief in simplicity, discipline, and diversification—principles that Vanguard has championed for 50 years.
