Traditional Mutual Funds, or Hedge Funds, or so called "Investment Professionals", they take your money and bet on stuff that they think they can win. They charge you 2% management (and some take a cut on profit).
Vanguard is basically... they get some uber rich 1% people on board, and they go out and buy literally everything possible in the Whole World from New York to China to Ethiopia. When I say everything it is basically everything... the logic behind it is that Human has been making progresses since Ice Age, Industry Revolution etc, and the World's GDP can only move forward.
Its "funds" are basically a bunch of subdivisions... You can buy them separately e.g. only the North American market, skip Ethiopia.