John Clifton Bogle of Bryn Mawr PA died at home on January 16, 2019, surrounded by his family. He was 89 years old.

Mr. Bogle, known as Jack, was born May 8, 1929 in Montclair NJ with his twin brother David Caldwell to William Yates Bogle Jr and Josephine Hipkins Bogle. They joined their older brother William Yates III (Bud) and became known by a lifelong circle of friends as the Bogle Boys.

Consistently driven, determined and hard working, the twins followed their older brother to Blair Academy in 1945 and graduated in 1947. Their time at Blair inspired a life long devotion and commitment to the school. After graduating from Blair, Mr. Bogle entered Princeton University as a scholarship student, working as a waiter in the dining halls and in the athletic ticket office to pay for his education. He studied economics, writing his thesis on the then unknown mutual fund industry, and graduated magna cum laude in 1951. While at Princeton he met and was befriended by Jay Sherrerd, class of 1952, who brought Mr. Bogle home to Bryn Mawr to meet his family, including Jay’s younger sister Eve. The two married in 1956 and had six children.

After Princeton, Mr. Bogle was hired by Walter L. Morgan, founder of the nation’s oldest balanced mutual fund, Wellington Fund, where Mr. Bogle was the driving force behind Wellington’s growth into a mutual fund family. A dispute with new partners at the Fund lead to his firing and subsequently his founding in 1975 of The Vanguard Group of Investment Companies, two occasions he proclaimed ever since that he underwent “fired with enthusiasm!” Leading the company until his heart transplant in 1996, he nonetheless remained forever after a vocal and strident advocate of the individual investor with books, speeches, opinion pieces, and public appearances.

Mr. Bogle was fiercely competitive, especially on the doubles squash courts where opponents feared his determination and drop shot. The family played tennis together, often at their treasured family home in Lake Placid, NY, a place to which they still retreat for the summer months. Not just athletically competitive, his relaxation came from completing the daily New York Times crossword puzzles, including Sunday, in ink, comparing his time to finish to those of his brothers and children.

A devoted philanthropist, Mr. Bogle served the Board of Trustees of Blair Academy from 1972 to this day, including 16 years as its Chairman. Among his most remarkable and proud accomplishments, he established the Bogle Brothers Scholarship Fund which to date has funded the education of nearly 200 students. In 1998 he was named Chairman of the National Constitution Center, overseeing its creation and building on Philadelphia’s Independence Mall where it continues as one of the city’s most treasured institutions. He remained active in numerous other local and national educational, civic, medical and arts organizations as well.

Mr. Bogle suffered from a rare and degenerative heart disease, and was admitted to Hahnemann Hospital in the fall of 1995 to begin the wait for a new heart. He received the extraordinary second chance at life in February 1996, for which he remained exceptionally grateful.

Mr. Bogle is survived by his wife Eve, daughters Barbara Bogle Renninger (Scott), Jean Bogle, Nancy Bogle St John (Gordon), and Sandra Bogle Marucci (Buddy), sons John Clifton Bogle Jr (Lynn) and Andrew Armstrong Bogle, twelve grandchildren, and six great-grandsons, and his brother William Yates Bogle III. He is predeceased by his twin brother David Caldwell Bogle.

“Vanguard Investors Kept Their Cool during Stock-Market Turmoil,” MarketWatch, February 19, 2018. This review of Vanguard’s recent announcement noted that the vast majority of Vanguard investors “stayed the course” during the recent volatility. Vanguard’s Center for Investor Research found that 97% of Vanguard households made no trades from Feb. 2 through Feb. 9.

The article concludes that Vanguard’s long-term-investment “ethos does seem ingrained in individual Vanguard investors, who sometimes dub themselves ‘Bogleheads’ in acknowledgment of the founder’s investing principles.”

A special surprise was journalist Ryan Vlastelica’s opening: “The founder of Vanguard, who has long advocated that investors take a simple approach to their portfolios by buying low-fee index funds and holding them for the very long term, seems to have taught his lesson well. . . . Jack Bogle should be proud.” I am proud . . . of all that we have accomplished together.

Best,

Jack

John C. Bogle

February 21, 2018    

Numbers Games–Reflections on the Uses and Abuses of “Big Data”

John C. Bogle’s CFA Conference Opening Remarks

Vanguard Founder’s Advice to Rivals: Stand Still, The Wall Street Journal

Jack Bogle: It’s Easier to Serve One Master than Two, Morningstar

The Road Less Traveled

The speech chronicles the remarkable rise of Vanguard and indexing from a sort-of-joke in 1974-76 to unprecedented industry domination in 2017, largely because of its mutual structure and its index strategy. What does that remarkable growth portend for the mutual fund industry? The eight highlights below summarize the key issues:

1. Index fund growth will continue. It remains to be seen whether broadly diversified long-term traditional index funds (TIFs) will lead the way, or whether exchange-traded index funds (ETFs) with their marketing attraction, substantial trading, and largely short-term focus, will dominate index cash flows. Pages 1-3, 10.

2. To meet the challenge of indexing, today’s active fund managers will have to develop a variety of appropriate business strategies. Page 10.

3. Active management is not going away, and large privately-held fund managers should pretty much stay the course, with few changes in their present business strategy. Page 7-8.

4. Conglomerate-owned fund managers (30 of todays 50 largest fund management firms) should adopt a “cash cow” business strategy. Pages 9-10.

5. Public policy—and the very words of the Investment Company Act of 1940—will compel fund directors to consider, not merely the business strategy of the manager, but the fiduciary strategy that places the investment interests of fund shareholders ahead of the business interests of fund managers. Pages 11-12.

6. Outside forces—a strong bull market and tax favored retirement plans—have driven mutual funds’ growth during the past 35 years. These forces will not repeat, and may even recede. Pages 11-12.

7. Fund directors, in general, have failed to measure up to this challenge, in part because fund boards are dominated by directors affiliated with fund managers. Such directors have two distinct fiduciary duties—one to the shareholders of the management company, the other to the shareholders of the mutual fund. Page 15.

8. Director lassitude has been reflected in the fact that more than 100% of the economies of scale in operating mutual funds have been garnered by fund managers. None of these economies have been shared were fund owners. (Since 1951, fund assets are up 5,400 times, fund expenses up 5,600 times.) Pages 13-14.

VANGUARD IN THE NEWS

Hi, all, Here are some more press clippings that highlight Vanguard.

1. “Years after surgery, a heartfelt reunion,” Philadelphia Inquirer, February 22, 2017. Thomas Jefferson University hosted a wonderful panel discussion with the two surgeons who performed my heart transplant way back in 1996, Dr. Rohinton Morris and Dr. Louis Samuels. They joined me and Jefferson CEO Stephen Klasko for a discussion on the 21st anniversary of my heart transplant. A standing room only crowd attended the seminar, moderated by students and focused on my transplant experiences and the similar challenges facing investment management and health care.

2. “Jack Bogle doesn’t feel ‘super confident’ about the market rally—here’s why,” CNBC, February 21, 2017. Just before the panel at Jefferson, my interview on CNBC was broadcast live to the audience. In the interview, I talked about the potential strength of the recent market rally, my outlook for stocks over the long term, and my “heart birthday.”

3. “A lesson in investing simplicity: Why the Bogle Model beats the Yale Model,” MarketWatch, February 7, 2017. I am a great admirer of David Swensen, who runs Yale’s highly successful endowment and is the pioneer of “The Yale Model,” which calls for large allocations to illiquid and alternative assets for investors with very long-term time horizons like university endowments. Nonetheless, I read with great delight this article comparing a simple three-index-fund portfolio, dubbed “The Bogle Model,” to the average endowment. Not only did the index funds beat the average endowment and even the top quartile endowments over 3, 5, and 10 years, it even beat the very best—top decile endowments—over 10 years (losing by only a whisker over 3 and 5 years). What a great endorsement of the power of simplicity over complexity—even for some of the world’s most sophisticated investors.

4. “John Bogle: Demise of fiduciary rule would be ‘step backward’ for nation,” InvestmentNews, February 9, 2017. InvestmentNews ran this summary of my recent New York Times op-ed about the Department of Labor’s fiduciary rule. In the op-ed, I referenced a consulting firm’s estimate that Wall Street would lose $20 billion through 2020 as a result of DOL’s rule, which I pointed out the overlooked fact that the $20 billion would go to Main Street investors. I added, “By any definition, that’s a social good.”

5. “The Granddaddy of Indexing,” The Globe and Mail, January 25, 2017. This interview touches on the history of indexing, the current investment environment, and Warren Buffett’s endorsement of indexing, among other topics. But I’m not sure how I feel about the headline—if I’m the “granddaddy of indexing,” who is the father?

6. “The man who transformed investing for Main Street sees a bleak future for Wall Street’s money managers,” Business Insider, January 24, 2017. This extensive interview with journalist Rachel Levy covers a wide range of topics. My conclusion about the asset management business: “We’re paying people to beat the market when they aren’t doing it, and when you think about it, that doesn’t make sense.”

7. “A Love Letter to Jack Bogle,” The Motley Fool, January 8, 2017. I always enjoy spending time with the gregarious Gardner brothers from The Motley Fool. This article is a transcript of a podcast I recorded in December with David. He generously said, “I don’t think anybody … can touch the influence that Jack Bogle has wielded over the investment world. It’s not just that he’s always been a reformer. [It’s] that he’s always tirelessly worked for the common man and for uncommonly good returns for the common man. . . . He’s really democratized investing through the index fund.” Thanks David!

Best,
Jack
John C. Bogle
March 1, 2017

Q&A With Jack Bogle: We’re in the Middle of a Revolution

Here are Jack’s expanded comments upon accepting the award.

Tuesday, November 1, 2016 at 9:30am to 12:00pm

Center for the Arts, Gore Recital Hall 110 Orchard Road, University of Delaware, Newark, DE 19711, USA

Financial/investing institutions form the bedrock of the U.S. economic system. Without them, the economy can’t grow and our capitalistic system would grind to a halt. However, few believe that our financial/investing institutions work as well as they could. Critics argue that misalignments promote the interests of the financial sector itself above those of society, the real economy and the individual citizen investors whose pensions and savings are entrusted to these institutions. They argue that errant expertise and incentives; gaps in accountability, transparency and governance; poor regulation and a misreading of economics combine to impose a huge stealth tax on individual savings and national economic promise. Further, they say that these structural and governance misalignments create systemic pressure for short-termism in the boardroom and within investing institutions.

Stephen Davis and Jon Lukomnik, two of the three authors of What They Do With Your Money: How the Financial System Fails Us and How to Fix It, will be joined by John Bogle, legendary founder of Vanguard, and Jennifer Taub, Professor of Law, Vermont Law School, for a robust, provocative discussion of how to fix our financial/investing institutions so that they serve individual citizen investors and the real economy.

Among the issues that will be discussed are: How have short-term oriented capital markets, the scores of financial intermediaries, and executive compensation structures both in financial/investing institutions and in our corporations combined to reduce long-term corporate investment in America? What are the consequences of governance gaps in investing institutions? What about the governance structures of pension plans and their plan sponsors? Should there be a shift in the governance paradigm to give individual citizen investors more transparency and more of a voice?

The discussion will also showcase potential solutions that range from the narrow and technical, such as potential revisions to the tax law, to the big and ambitious, such as fresh models of governance and transparency for financial/investing institutions and for pension/savings plans.

Please join us for a fascinating discussion peering behind the curtain of finance to understand why the capital market works the way it does. And how it can potentially change for the better.

A complimentary lunch will follow the program.

Click here for more information and to register for the event.