Economy

Founder of Vanguard John Bogle dies, 89

Founder of Vanguard John Bogle dies, 89

It was no frills and enabled investors to avoid the higher fees assessed by professional fund managers who frequently failed to beat the market.

"If a statue is ever erected to honor the person who has done the most for American investors, the hands-down choice should be Jack Bogle", Buffett wrote at the time, noting that Bogle, whose own net worth was at just $80mn in 2017, "amassed only a tiny percentage of the wealth that has typically flowed to managers who have promised their investors large rewards while delivering them nothing".

Bogle suffered several heart attacks over the course of his adult life, starting at age 31, and underwent a heart transplant in 1996.

As recently as 2007, index funds and ETFs accounted for only 15 percent of long-term fund assets, according to the Investment Company Institute.

Through Vanguard, Bogle perfected "buy and hold investing" while his index mutual fund allowed investors to gain high returns at a lower cost than actively-managed funds.

Paying tribute, Tim Buckley chief executive of Vanguard said: 'Jack Bogle made an impact on not only the entire investment industry, but more importantly, on the lives of countless individuals saving for their futures or their children's futures, ' said Vanguard CEO Tim Buckley. In contrast to a management company, which in most cases controls the fund complex and provides all the investment, administrative, and marketing services required in its operations, Vanguard is more like a mutual insurer, owned by investors in the funds, which employ their own staff.

Together the five largest Vanguard funds saved investors at least $5 billion in fees in 2018, compared with what they would have paid to keep the same assets in the largest active funds, estimated industry consultant Neil Bathon.

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"Our challenge at the time", Bogle said later, "was to build, out of the ashes of major corporate conflict, a new and better way of running a mutual fund complex". He said he learned an important lesson in how little money managers really know about predicting the market.

After graduating from Princeton in 1951 with an economics degree, Mr. Bogle was hired by Walter L. Morgan, founder of the Wellington Fund, a Philadelphia-based fund management company. He spent his days answering fan mail, preparing speeches, writing books and appearing as a commentator on television.

Fortune magazine named Bogle one of four "Giants of the Investment Industry of the 20th Century" in 1999. Five years later, he personally filed a friend-of-the-court brief in a fund fee case that came before the U.S. Supreme Court.

Being born on the cusp of the Great Depression and raised in its aftermath steeped Bogle in the virtues of thrift, hard work, and faith. He graduated from Blair in 1947 and was voted most likely to succeed.

After retiring from Vanguard in 1996, Bogle continued to write and speak on financial markets and investors up until his death.

Bogle died at his home at his home in Bryn Mawr.

With his wife Eve Sherrerd, whom he married in 1956, Bogle had six children, 12 grandchildren and six great-grandchildren.