Vanguard Group founder championed index funds
JOHN C. ‘JACK’ BOGLE | 1929-2019
VALLEY FORGE, Pa. — John C. “Jack” Bogle, who simplified investing for the masses by launching the first index mutual fund and founded Vanguard Group, died Wednesday, the company said. He was 89.
Mr. Bogle did not invent the index fund, but he expanded access to no-frills, low-cost investing in 1976 when Vanguard introduced the first index fund for individual investors, rather than institutional clients.
The emergence of funds that passively tracked market indexes, like the Standard & Poor’s 500, enabled investors to avoid the higher fees charged by professional fund managers who frequently fail to beat the market. More often than not, the higher operating expenses that fund managers pass on to their shareholders cancel out any edge they may achieve through expert stock-picking.
Mr. Bogle and Vanguard shook up the industry further in 1977. The company ended its reliance on outside brokers and began directly marketing its funds to investors without charging upfront fees known as sales loads.
Mr. Bogle served as Vanguard’s chairman and CEO from its 1974 founding until 1996.
He stepped down as senior chairman in 2000 but remained a critic of the fund industry and Wall Street.
The advent of index funds accelerated a long-term decline in fund fees and fostered greater competition in the industry. Investors paid 40 percent less in fees for each dollar invested in stock mutual funds during 2017 than they did at the start of the millennium, for example.
Vanguard, based in Valley Forge, Pennsylvania, offers both index and managed funds but remains best-known for its index offerings.
“A lot of Wall Street is devoted to charging a lot for nothing,” billionaire investor Warren Buffett told CNBC. “He charged nothing to accomplish a huge amount.”
Mr. Bogle spent the first part of his career at Wellington Management Co., a mutual fund company, then based in Philadelphia. He rose through the ranks and, in his mid-30s, was tapped to run Wellington.
He engineered a merger with a boutique firm that was making huge sums but was ousted after the stock market tanked in the early 1970s, wiping out millions in Wellington’s assets. He said he learned an important lesson in how little money managers really know about predicting the market.
Vanguard did not provide a cause of death. Philly.com reported he died of cancer, citing Bogle’s family.
John Clifton Bogle was born in May 1929 in Montclair, New Jersey, to a well-off family; his grandfather founded a brick company and was co-founder of the American Can Co. in which his father worked.
Bogle attended Manasquan High School in Manasquan, N.J, for a time, then got a scholarship to the prestigious all-boys Blair Academy in Blairstown, New Jersey. Mr. Bogle graduated from Princeton with a degree in economics in 1951. His thesis was on the mutual fund industry.
Mr. Bogle is survived by his wife, Eve, six children, 12 grandchildren and six greatgrandchildren.