YouSaid · the spoken record

Rodney Comegys

lines on the record: 57
first: 2026-04-20
most recent: 2026-04-20
sittings or episodes: 1
sources: podcast

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“I might not have thought as a kid who went to college, who had flown on an airplane one time that I'd have the amount of experiences that I've had on both a professional and a personal level. My family and I had a chance to move to Australia for three years where I ran the investment team. I had a chance to go to China as a part of work. I've had a chance to go an incredible amount of places on personal travel. Never thought I'd see the world and understand the world as a creator who grew up in a small town in Delaware with 1,500 people.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“Interest rates. Everyone spends a lot of time talking about them and whether they're going to go up or go down. I find the whole thing to be a bit of a mystery and very hard to predict. We spend a lot of time in this business talking about them.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“What's the thing that could happen that you suspect will never happen? Assume it happens. Can you live through it? If not, you shouldn't be doing it. That's what John taught you is this common sense approach to risk. Also, that you had to do your homework to understand the risk. Too often in this business, people go, that's never going to happen. You go back and go, yeah, it happened in a great financial crisis. It happened at this point in time. If it can happen, it probably will. So be ready for it.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“One is from my early career days, which was the captain of the USS Archerfish. The submarine I was on from 1993 to 1996. Captain Bob came on maybe six months after I was there, Captain Holland. He still had a standard of excellence. He said we're going to be the best ship in the Navy every day because we have a mission to do on behalf of the United States. He treated folks like adults. What do you need to do your job? Let me help you get that maybe around the edges. Hey, why don't you think about that differently? When only step in if there was some real reason to. It showed me the early form of delegation to young people who are talented. Second person was a guy named John Hollier I mentioned earlier. John was head of risk management. He was my first boss in the investment management side. What John taught me was always think an investments, what is the worst outcome?”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“Youth is one of the things. It's a hand eye coordination. It's fundamentally a shooting game. You're hitting a ball with a flipper at something. Young folks just got better hand eye coordination. Then there's some level of knowledge of the game, the ability to move the game around. I'm not great at it. I'm okay at it.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“I have a pinball collection, old school buttons on the side, flippers. I have about 40 pinball machines. I like to play in pinball tournaments. I have made a lot of good friends across the globe by playing in a very nichey hobby that's been a part of some things my family does with me too, which is play pinball. My kids do. My wife has no interest in the topic.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“We look like we are today, which is the best place for an investor to get an investment product. I suspect like we have seen in other areas, AI will help to enhance our customer service experience in a way like the web has. When I first got to Vanguard, people call up every day for a price of the fund and their value. No one does that anymore. They're going to their phone app to do it. You got to imagine it's going to continue to help investors make better decisions through engines that also make it more personalized. Your financial situation is different than mine. The more information we can get with the right advice engine behind it gives you better bespoke advice that's specific to your family's situation, your wealth level, and everything else. We're in the early days of that at Vanguard in the industry. Customization of advice will be one of the big areas.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“think about what will it be like five ten years from now in terms of how we run index portfolio. I'm positive I won't recognize the place.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“AI's made the price discovery in the market better. We want every active point of view in the portfolio, and if AI is helping the active managers to make a better decision, better pricing and better knowledge. Indexing's perfect for AI as a broad investment concept because it takes advantage of all the pricing. If somebody finds an AI version of the stock price is wrong and they buy it, that information is priced in the market. We've tried to think about the decision making process, trying to find ways to capture it and understand it so we make better decisions in the future. We're relying less on the human beings, historical knowledge to improve our decision making. It's very early in that process. Riding away who's driving”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“That into an AI model, we're trying to also put efficiencies in. Let's touch the portfolio less. We don't touch it a lot today. You don't trade on average a trillion dollars of execution on an annual basis by going in and touching every stock. We're using algos technology to what we should continue to do that and even more of it.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“You could go two directions with it. One is something that's not good for investors. That's cutting the index into small pieces, calling it a net next fund where it's simply an act of exposure. Even worse is if you put leverage to it and triple leverage it and claim you're giving negative or positive 3x return and you are for one day and you're not for the long time series. Unfortunately a lot of index innovation is marketing, positioning for sales and not good for investors. The second aspect is everyday coming in and running the index in a more efficient operational way. We're trying to think about corporate actions and what could AI tell us in large language models rather than 25 years of Mike Perry's history having to be transferred to the next person. Let's look at our history and pull together what worked and what didn't work for us and try to”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“We've said, hey, we might not have this scale to drive costs. So let's go get a great manager, make sure that investors know what they're getting, and it gives them the diversification of it.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“Still the early days, we do have a partnership with harbor vests for some of our high net worth retail investors. We've had some success there gathering assets. We've gotten the equation of a high quality manager, fund of funds manager. They're working for the right price for us. We would love over time and we'll see what the government does with allowing more availability of private access for investors. We want to have great managers at a reasonable price in that space. The only way you're going to succeed in the private space. Only time will tell and it's very early days.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“And sometimes fire active managers who they believe have the ability to outperform and have those skills and they work for a vanguard price, which is lower than anyone else in the active space. We love active management.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“We love all forms of investing that are low cost. Our history is active management. Our oldest fund is the Wellington Fund, second oldest mutual fund around that fund is a vanguard fund, balance fund sixty forty, active equities and 40% active bonds. Wellington runs on our behalf. What we believe is you can outperform inactive if you do two things. One, you have a great manager, one that has the skill to do so. It's a tough job to do to outperform. The other thing you have to do is keep your cost low. Even if you're outperforming, if your fee is too high, you're going to destroy your alpha. The third part of active management is you have to be patient. We watch some of our best active managers perform poorly for a few years, five years, and their style of investing returns. So colleagues that do nothing but oversee hire.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“Gus was tenacious and went back in and said, You really should. This is a way for us to take our business from being just a direct place where he sold mutual funds to putting it out there on a brokerage platform that today advisors can use it. It's widened the use of index funds. Check Bogle still hated them. He would still talk to him. I got an earful in a number of occasions from Jack as to why would you give someone the ability to trade interday. No one ever needs it. They need to buy it once today, sell it again in 20 or 30 years. The majority of investors are long-term holders, whether they're in ETFs or mutual funds, holding periods at Vanguard or five to ten years. They're not using it in an inappropriate way, but it does give more access to more folks. That's been part of our success over time. And it's allowed us to be used by advisors.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“All of that Ted started before I got to the investment side of Vanguard. We did launch ETFs after I was at Vanguard two years. At that point, I was working in the 401k operations. It had nothing to do with the original couple of ETFs we brought to the market. The history goes back to Jack Bogle talked to the American Stock Exchange about the spy product, and he said, what are you crazy trading intraday is the worst thing for investors. In the early days, Jack Bogle was highly opposed to this. Forward probably a decade or so Gus Sauter came to Jack Brennan and said, we should offer these. Gus pitched it to Jack Brennan and said, this is an alternative distribution vehicle. Intraday trading is not where we're about. It does open the aperture of getting our products to more people, making indexing better. Jack Brennan threw him out of the office the first time.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“Accredited defaults, they use the credit process to try to identify securities that might have a slightly wrong price or one that might be headed in the wrong direction. They're just as index centric as we are focused on tracking here. They have different levers to do, and they also have optimization to do there. We've always had active fixed income at Vanguard run in-house. We have continued to increase the size of our team, the depth of our team. We believe we can outperform in the fixed income market in those portfolios because we have the right team at the classic Vanguard low price. We believe we do provide institutional quality active management for investors.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“At a high level fixed income indexing, you can't own every security. They have to do a lot more with their sampling and with their optimization around it. I would say it's easy if you control your duration, you control your credit quality, you can get the index return.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“On average, about 8% of every company in America that's free floated, most importantly, we say, who are we owning them on behalf of? These are 50 million Americans not vanguard owning 8% of the company. You have to understand that mindset, we are a long-term permanent owner of these companies. Therefore, we should make sure they're well stewarded and well governed. That's our role to play.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“IPOs are always difficult to predict in this space, demand early on can outstrip supply or the reverse. Facebook came public and the story was Facebook's going to go to the moon and beyond. Facebook broke price, went down, and stayed down for nearly a year. Facebook is an amazing investment return story. Then the first days, it's very hard to predict which way supply and demand will equal. There are people in the case of any company that comes public that want out of there. There's a demand, whether it be retail, index funds, active managers. It takes some time for those things to even out.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“Minute a company comes public, it belongs in an index fund. We've had that belief for a long time. You might need a few days to get trading and figure out price discovery. Our best indexes add those securities in day three or day five. That's the best practice. Why should they not be in an investor's portfolio from there? They should be flow adjusted. Most companies come public, only bring 5 to 10% of the company public. We only want to buy five to 10% on the day of the IPO. Many years ago, Yahoo came public with a small float. Indexers bought a lot of it and the price went up. The demand was greater than the supply. Gus Sutter and Mike Buke, people long before me on this desk, pushed really hard for all of our indexes to be flowed adjusted, which they are today. That reflects what's available in the marketplace. And therefore, an indexer doesn't oversize the amount of shares brought to the market.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“With that money that's gone into some of the successful large private companies, should they go public and there's some noise that some of the bigger ones will this year, how do you think about integrating that into your index products?”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“Markets. There's no place that trades this well. There's no place that has as much liquidity. There's no better place to raise capital. What I don't know is whether this staying private for longer is a permanent phenomenon or not. Let's find a way to get some high quality private assets into retail investors' hands over time.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“Not sure we know quite yet what it means for the future, the shrinking number of companies from a peak in the US, six, 7,000 securities about the time we graduate, a business school down to about 4,000 U.S. companies is just the fact. When you go in and you dig into it, you discover what we lost was a lot of really small companies, a lot of microcap securities, a lot of small cap companies. For long-term returns, it's not clear you lost much. We are seeing companies stay private longer, which does mean there may be less return in the public space. It's hard to know. There's SpaceX and others sitting out there waiting to come public. I would love to have had him in my index fund back when they were a $100 billion company before whatever trillion is. I still believe the best place for companies to grow. Their business is the U.S. public.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“Is the right benchmark if you're a large cap active manager, you've got to go compete with it. That's the universe. If you're a CIO of a pension fund or you're running an endowment, you've got to think about a much wider universe as your benchmark. The 500 is a narrow part of that. You got to add in the international, you got to add in bots. You have to add in your availability of what you can do in the private space. We believe privates belong in everyone's portfolio, the private space, they got to be low in cost. We like that at Vanguard to be a good private manager, they got to be top quartile. We believe over time we can add that into someone's portfolio. That's how you have to think about the benchmark. Shortcut to the world when you watch TV is the 500, but not the right benchmark if you're on the serious side of investing. You have to have a more well-diversified benchmark that reflects your fishing universe of where you can go look for investment.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“We've said the market's wrong, and suddenly we've created an active portfolio. It's also not the first time that we've had high concentration. The U.S. has been concentrated before. Those businesses are not one business. Some of our colleagues and our investment strategy group are doing research on this alphabet. You have an amazing search engine business. You have an amazing business around YouTube. Is it one business or two? The counter argument will be it's one price and one PE ratio that we could argue whether it's the right valuation or not. I can't tell you it's the wrong valuation. I'm the indexer. That is what all the world's active managers, retail investors have decided is the right price of Alphid. Why should I fight it?”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“30% of the SP 500 is made up by seven companies. The S&P five hundred should not be your benchmark nor your portfolio. If you do that, you are exposed only to U.S. large cap companies. 500 securities, any investor wants diversification needs to add small cap securities in, but total market solution, you need global securities. By the time you're done with that, you've increased your universe about 50%. You've taken that exposure down by about half by global market cap weighting the globe and you add in bonds you need to add in about 40% bonds versus 60-40 portfolio natural diversification takes care of some of the concentration. What's the alternative? The Marquis decided the price of Apple, Navidia, Tesla. If we make a deviation from that,”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“Our NyBox type things, along with sectors, maybe some unique sectors like dividends, country exposures for non-US investors.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“We have about eight and a half trillion of index fund assets that would include our fixed income index assets, which a colleague of mine runs on behalf of investors along with the active fixed income space. That's one big business for us. Within equities, we have two teams that run assets today. One is the team that reports to me, the global equity team. We run about $5 trillion of assets. They range from total stock market broad exposures to global broad exposures to value and growth exposures and country exposures. We're running Australian and UK. There are wide range of outcomes along with running target date suites. Over on the other side are SE team or strategic equity team. They're running size and value growth, sector funds for U.S. investors. They're close to what you would see in Warning.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“We're taking very small bets where we have 25 years of history of running index funds where we believe this is something where we can add value. It's no different than an active manager. It's a measured risk. It's just extraordinarily tiny compared to taking an overweight or an underweight and an active fund. We're not going to use all of our tracking error budget on one active decision or choice. Tracking error first. is the best way to put it.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“Worked in Funda County, he got to be a portfolio manager and a trader. That's all he wants to do. And we have a career path that goes up through senior portfolio manager and officer. Mike is now showing the next generation how to run a complex emerging market global portfolio. I have roughly 30 people here in the US. I have another 20 folks globally. I have a team that reports to me in Australia that cares as much about American investors as we do. A team in London that cares about American investors as much as we do. And we're completely globally integrated. We do work on behalf of them for an Australian global fund that needs US exposure. The folks here are doing it for them. So it's a very integrated focus on indexing.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“Number one is this portfolio manager trader is one person or one team. It's the ability to instantaneously make the trade-off between I could trade something exactly like the index. I think I might be able to add value. I can make that decision because I have the knowledge of what the risk is of doing so. I have the knowledge of do I think the trade or the alternative choice is going to be successful and add value. We have the right risk oversight of those choices to make sure that we don't let people do crazy things with their portfolio. We're going to get the outcomes we do. That's the number one thing that differentiates us. This is a career for folks. I have out on my desk a gentleman Mike Perry who's been running our emerging market portfolio. He's been in this group 25 years. Mike got to Vanguard.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“Or how to operate their business, we're more about making sure we get good governance over a long period of time. We've introduced investor choice. Investor choice is allow the shareholders of our funds to express a point of view around how they want the companies in our portfolios to be run. For that, we think about returning the vote to them and they can choose one of five policy portfolios. They could decide to vote with management. They could decide to use Vanguard stewardship. They might have an ESG point of view. If you want to take a point of view on how companies should be run, you make that choice. We've never made that choice other than to make sure the board is well governed and well running.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“Governance is all about companies that are well run to do well over a long period of time. We have a stewardship team internal to Vanguard, and that stewardship team has always thought about making sure the company's well run. We want a board of directors capable of overseeing the strategy of the company. We want a board of directors who is going to make sure the company gives investors information, make sure that you can see the financial returns, the risks that the company's talking so investors can make great decisions. We want to make sure that the executive compensation is aligned with long-term shareholder value. We want to make sure that the executives are paid when the company does well. Finally, we want to make sure that the board of directors is thinking about shareholder rights. Our rights are protected as an owner so that we have the ability to have the vote. We stay away from things like telling the company what business to be.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“One of the ways we had some value is with regard to the securities lending program. In securities lending, if someone wants to borrow one of our securities, they're willing to pay for it. Maybe a hedge fund wants to put a short position on. We lend out what we call specials. Specials are ones that have a high rate paid to the person giving the lend out. We will lend those out for fee. That money flows back into the fund as positive excess return. 95% of the money made in the program goes back to the fund, the 5% of it is kept to run the program. We think that's a good way.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“We look for places where there's an asynchronous return, where there's more upside than downside. That's our basic role. And we don't do a lot of it. An example would be when a company brings a secondary offering to the market. They're selling new shares and raising money, we would participate in that. Statistically, we've seen that we can buy it from the bank at the time of offer. And by the time it's added to the index, we've usually bought it at a lower price than when it's added. Do we win on every one of those? No. We take a risk-controlled way. We think about that corporate actions or another, how we elect to take when maybe two companies are merging together, how we get through there to the end result. There might be two paths. You might be able to keep the shares you have and it turns into the new company. You might be able to sell in the market.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“shares on our trading desk the portfolio manager and the trader it's one job one team when you go to most investment managers portfolio managers sit in an office think great thoughts and what stocks they're going to buy and the traders are doing the execution on trading desk most of our portfolios are not optimized they're largely replication the most important thing we can do is think about that trade execution how we do those things matters a lot more than what we're owning because we're going to own them all”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“Think about it in a risk adjusted way for every fund here. We have expectations of tracking error. That's how we're judged. Number one is track the index. Something like a 500 index fund, we're going to see tracking RB no more than a couple basis points. Typically less than one. We're not going to take a lot of risk there. You can imagine if Apple's number of shares in the index are changing because there's a buyback. We're having to sell some Apple. We're going to be largely on the close with that stock. We're not going to be able to take a position. Many investors are trading Apple. We have no ability to know where that's going. On the other side of it, in an international portfolio or global portfolio, maybe there's not the liquidity in the Philippines to help us with the ad. The risk is small. It's a large portfolio. The Filipino ad it might be a small addition might take us a week or two to buy the number of.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“Maybe you do a tax harvest. Maybe you use the ETFs, creation redemption mechanism to balance your taxable gain situation. Finally, there's a hidden thinking indexing. When you have biased stock that's added to an index, that price might go up. You might have market impact. You hate to see the market go up because the indexers are buying it just to come back the next day. The index, you have zero tracking. You have zero value added or destroyed. Yet the underinvestor paid more for the stock than maybe they could have. I have a team globally that makes that trade-off between those four things. Excess return, market impact, taxes, and where you can positive excess return. That's what goes into it. And I'm fortunate to have a team of 50 people who do that every day for us.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“5.0001. We might have a little bit of it, basic thumbroll of over and underweights. Then we have more sophisticated models using an axioma, risk engine that looks at it in an optimizer. Tracking error is one thing. While you're tracking, you're managing three other things. Number one is if you're going to do different than the index you want to outperform, you want to leave money on the table. But times we will do small deviations from the index where we see that we can recover value for our shareholders. Maybe there's a corporate action. Maybe you could take cash or shares. We're going to take the one that has the greater value. Maybe the index treatment's different than that. We believe we can add a little bit of value back. It's positive excess return for investors. The third one we're always thinking about is taxes. You don't want to pay a capital gain out of an index fund or an equity index fund. You're trying to always think about taxes.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“Number one is there are people in our operations teams that have to make sure the index arrives every day and make sure that the portfolio manager knows what's changing in the index. They got to have an accurate index. The second thing you have to know much money you have every day, my portfolio team, 50 people on a global basis, they're putting people's money to work. If you send us a check for a million dollars, we've got to make sure that we invested it four o'clock at the end of the day perfectly in line with the index. That's one aspect of it. The other part of it is how we do that. You got to know what the index is. You got to know what you own. You got to know how to put the cash to work. If you're going to execute your balancing four things, one, you want as close to tracking as possible. That's how the world judges an index fund. We have to be excellent at that if the index has 5% apple in it. You look in our portfolio, you're going to see us have.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“There's not an investment thesis for it. We've stayed more pure to it. We've cut the indexes into what I would call logical blocks we started with size, large, medium, small, value gross or the Morningstar 9 blocks. We have dividend strategies, higher dividend strategy and a dividend quality strategy that we believed in. We've given some investors some choices with the ESG indexes, but we're trying to find things that are still capturing, I would call it a factor, something logical for investors. We stayed away from things that are hot or nichey. I don't think you're going to see us offer a jet index like others have done, capturing airline returns too narrow, too specific for us, better served by an active investor. That's the basics of it. Capture the investment return, then you think about the practical implications of making it liquid and available.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“There's the original concept of indexing, which is capture as much of the world's investment universe as possible, and you put it into a total market fund. For those, you're just trying to get from the largest security in the U.S. to the smallest one that you can invest in. What you're looking for there is all the securities that are equities, and then you're thinking, are they liquid enough and available enough for us to invest in? Then you include them all. That's the simplest version of indexing. And we do that all around the globe. We have total stock market fund here in the US for American investors. We have an Australian index fund based on the ASX 300 for Australians, total bond, total international, total world. Capture the whole equity. Then you start to go, if you're going to cut the index into pieces, what makes sense? One of the challenges in this business are people are slicing the indexes into pieces that don't make sense.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“With CRISP, the Center for Research and Securities Pricing and with FTSE to make some changes to our index products to reduce cost. CIO of Vanguard, who was really an indexer. What were the key things about indexing that you needed to do to run a grade index and helped do that? And now those products are run today for us.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“About it. I went to see John Hollyer and John Seddy, I need some help on my operations and my management. I said, John, how do you do staff meetings? He goes, what do we need to have staff meeting for? I just have a yellow sticky and tell people what to do. So I hope John put in place processes that help scale his business. For that, I get to learn from John, who's one of the world's greatest risk management folks about how to reduce risk in the funds and how to allow people to take risk. John taught me the basics. John was a fixed income guy. He loved all the complicated fixed income stuff. There was less interest in the equity side. I loved equity indexing. From there, I did two big things early in my time in investments. I helped launch a lot of the ATFs globally. I went to Canada and helped with the launcher products there. I went to Europe and helped there. I went to actually Hong Kong and helped launch some of those. I also worked a lot with the index providers. I work specifically.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“I went to work as far from money management as you could be. We were taking the payroll in for big 401k clients and making sure that that weekly paycheck was getting invested on behalf of the investor with accuracy and trying to make sure operationally it was good. I then went to Arizona to a call center, taught me about frontline customer service. And then I did two years of corporate work running our Six Sigma Quality Improvement Program. A decade into Vanguard, I've done nothing but operations, including the old days of answering the phones myself as part of our Swiss Army to try to serve our investors, but it really made you learn about the retail investor and our foreign K investor. And I had an opportunity. Vanguard likes to rotate people. And I got a call from my boss. He said, how would you like to go to work for a gentleman named John Hollier, who is head of risk management and is working to globalize risk management? I said, that's near the funds, isn't it? Mike's like, yeah, you're going to learn.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“In mainstream America, they probably need broader, diversified, more straightforward things. We now have a much more sophisticated investment base 25 years later with advisors who need a bond product with more complexity to it or want to target a part of the curve or a more active type decision. We've had to adopt, but every product that we offer, we want it to be best in class and competitive from a cost perspective, if not the lowest cost.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“Number one is be honest, be transparent, and be clear. If you're talking to someone about an investment product, talk to them about the benefits and the risks. We care about low fees. We care about trying to make the investment landscape better for all investors, not just our investors. My team, for example, has worked very hard in the last couple of years to make the closing auction in India possible because we buy a lot of Indian securities and our index funds and auction makes it more efficient and makes it cheaper to execute and gives us better price discovery. That's the type of zeal we're doing on behalf of our investors on a global basis. It's that transparency low cost. Make sure we believe in the investment vehicle or investment product. It should be something that's long-term and enduring. It's always been a challenge for us. If you think about those investors that I talked about wanting to serve your mom and pop investor.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source
“80% active at the time, 20% passive, but you could see what we were doing. We were the low cost leader with high quality products. Andre introduced me to Tim and to Jack, and I had a chance to come here. Originally, I worked in operations. 401k operations are part of it. I went to Arizona and ran our 1,200 person call center, which I loved. That was the front line of Vanguard. Welcome to Vanguard. How can I help you? Trying to answer those questions for their first savings vehicle for their children's college or the start of her IRA for retirement or whatever their financial need, hopes, and dreams were.”
2026-04-20 · Capital Allocators · Rodney Comegys – The Mechanics of Indexing at Vanguard (EP.498) · IDENTIFIED FROM THE TRANSCRIPT · source