We take this opportunity to pay tribute to legendary Vanguard founder, John “Jack” Clifton Bogle, who passed away on January 16, 2019.
Bogle, arguably more than any other person in modern history, profoundly impacted the way individuals can invest, and the way in which we invest for our clients to this day.
Following academic success at Blair Academy and Princeton University, and a storied career at Wellington Fund, Bogle founded Vanguard in 1975.
He was inspired to start Vanguard in order to create an independent mutual fund company that operated at cost and with no loads with the goal of driving down investment expenses for investors. Vanguard has never looked back, and without sacrificing quality, remains a low-cost leader with an average expense ratio of 0.11% compared to 0.67% for the rest of the industry(1).
By starting Vanguard, Bogle also established the first “mutual” mutual fund company in which Vanguard mutual fund investors owned the company. This structure drove home Bogle’s focus on eradicating conflicts of interest by aligning the interests of the investor with the interests of the mutual fund company, and it remains the company’s structure today.
Further, in 1976 Bogle invented the index fund. Though the concept was widely ridiculed at the time for pursuing mediocrity, we now know indexes outperform roughly 92 to 95% of actively managed funds(2) and, as a result, index funds hold roughly $5 trillion of investor assets. Famed economist Paul Samuelson even compared Bogle’s index fund invention to that of the wheel, the alphabet, and Gutenberg’s printing press.
For his work, Bogle was honored with being:
- Named one of the investment industry’s four “Giants of the 20th Century” by Fortune magazine
- Awarded the Woodrow Wilson Award for “distinguished achievement in the Nation’s service” by Princeton University
- Named one of the “world’s 100 most powerful and influential people” by Time magazine
- Awarded the Lifetime Achievement Award by Institutional Investor magazine
Due to his relentless investor advocacy, Bogle has had a profound impact on every mutual fund investor in the world, because even those who are not invested with Vanguard are invested with companies that have been pressured by Vanguard to be better stewards of their clients’ money.
Mr. Bogle, we thank you.
The Integris Team
Sources: (1) Vanguard (2) Barbara Friedberg, “Are Actively Managed Mutual Funds Fading Away” U.S. News & World Report 9/5/18