* Tim Buckley, head of retail investor group, is replacement
* Sauter directs groups overseeing $1.6 trillion in assets
* Departs after 25 years at the company
By Ashley Lau and Aaron Pressman
NEW YORK, June 22 Gus Sauter, the long-time
chief investment officer at Vanguard Group, the largest U.S.
mutual fund company, will retire at the end of the year, the
company said on Friday.
Sauter, 57, will be replaced by Tim Buckley, 43, a managing
director at Vanguard, based in Valley Forge, Pennsylvania.
Sauter currently directs Vanguard's global investment management
groups, which oversee $1.6 trillion in aggregate assets.
"Vanguard has become a much deeper organization and had
grown quite a bit so I do not think his departure will represent
the same kind of challenge as it would have 10 years ago," said
Russel Kinnel, director of mutual fund research at Morningstar
Vanguard oversees some $2.1 trillion in total assets
including 170 U.S.-based mutual funds totaling $1.8 trillion.
Sauter, who joined Vanguard in 1987, was key in helping the
company build and maintain its leadership position in the mutual
fund space. He spearheaded Vanguard's push into exchange-traded
funds starting in 2001, a group that now ranks third-largest in
the world with almost $200 billion in assets.
"They didn't just simply sit on their own line of index
funds and say 'these are good enough, we are happy'," said
Kinnel, referring to the company's decision to move to indices
that allowed for lower turnover and lower trading costs. "They
changed a lot of their indexes to find better ones out there."
Vanguard's first ETF, the Vanguard Total Stock Market ETF
, began trading in 2001 and is now one of the largest
with $20 billion in net assets.
Sauter, who was named chief investment officer in 2003, also
led Vanguard's efforts to develop quantitative stock management
strategies in the 1990s.
STAYING THE COURSE
Buckley will assume Sauter's job from his role as managing
director of Vanguard's retail investor group. Buckley has held
senior roles at Vanguard since 2001, when he became chief
information officer and head of Vanguard's information
technology division. He joined Vanguard in 1991 as an assistant
to then Chairman John Bogle.
"Our focus will continue to be on low-cost, broad based, and
enduring investments, and managing Vanguard's clearly defined
portfolios with our hallmark discipline and prudence," Buckley
said in a statement.
The most important next step for Buckley will be to stick to
the current framework executed by Sauter and not veer from the
"well-defined" Vanguard franchise, said Dan Wiener, editor of a
newsletter for Vanguard investors and chairman of
Massachusetts-based wealth manager Adviser Investments.
"Working in this low-return environment... the best thing he
can do is stay in the box," Wiener said.
In his new role, Buckley will oversee more than 300 equity,
fixed income, risk management and investment strategy
Sauter had in recent years focused on integrating Vanguard's
global investment management reach to aid the company's
expansion in Australia, the Pacific Rim, the U.K., Canada and
"It is time to pass the baton to a new leader who can
further build upon our strong investment management foundation,"
said Sauter, who is considering teaching among his