Remembering Jack Bogle

On Wednesday the investment management industry lost a true legend: John “Jack” Bogle, the creator of the world’s first index fund and founder of Vanguard, died at the age of 89.

 Because index investing is now so commonplace, it is easy to forget just what a disruption it represented when Bogle launched the first retail index fund in 1976. That approach reflected Bogle’s controversial belief at the time that by buying and holding the stock market at low cost, investors could do better than most active managers over the long term. Bogle’s devotion to index investing transformed the industry and provided a low-cost entry point to long-term investing for millions of individual savers.

 In his 2017 annual report Warren Buffett wrote, “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.” Thousands of his fans, self-described Bogleheads, praised his devotion to keeping investment costs low, maintaining broad diversification and staying focused on the long term.

 Bogle was a prolific writer and speaker, authoring more than a dozen books and nearly 30 academic articles for the FAJ and JPM, arguing the merits of low-cost, low turnover, diversified buy and hold investing. He enjoyed jousting with his active management peers and reveled in assembling the data showcasing the long-term outperformance of index funds. Even his namesake son, John Bogle, Jr., who made a successful career as an active manager, conceded the advantages of low-cost index investing for the average investor.

 Originally hired by Wellington Management when he graduated from Princeton, Bogle enjoyed recounting how the lowest point in his professional career actually led to the creation of Vanguard and the rise of index investing. In 1974 he was fired by Wellington and founded Vanguard and launched the first S&P 500 index mutual fund. A history buff, Bogle named the firm after Admiral Nelson’s victorious ship in the Battle of the Nile against Napoleon.  

 Bogle displayed the best attributes of our profession and was the model of a principled, visionary, scrupulous, thrifty and relentlessly optimistic investor. He profoundly changed our industry for the better and exemplified the success that comes when we focus on doing what is right for investors. 

Investing involves risk including the risk of loss of principal.

The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor. All material has been obtained from sources believed to be reliable. There is no representation or warranty as to the accuracy of the information and State Street shall have no liability for decisions based on such information.

The S&P 500® index is a market-capitalization-weighted index that contains 500 large-cap U.S.companies.

It is not possible to invest in an index.

The S&P 500 Index is a product of S&P Dow Jones Indices LLC (“SPDJI”), and has been licensed for use by SSgA. Standard & Poor’s®, S&P® and S&P 500® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”).