Mutual Fund Giant Vanguard Flexes Its Muscles

The index-investing pioneer now has $3.8 trillion in assets. How will it use the clout that comes with all that money?

The question made him uncomfortable. And suddenly he was getting it from all directions. In the fall of 2010, Vanguard CEO Frederick William “Bill” McNabb III found himself fielding the same query over and over again: “What does it feel like to be No. 1?”