On Wednesday, the investing world was saddened by the passing of John Bogle at the age of 89. He was a legendary investor who revolutionised the world of finance.
John Bogle founded Vanguard, which today is the largest mutual fund organisation.
He was also the man who introduced index investing to the world, which has grown in leaps and bounds over the last decade. In 2017, index funds had an 18% share of the fund market. Moody’s investors’ service estimates that index investing will overtake active investing funds by 2024.
John Bogle’s leaves behind his legacy as the pioneer and leading advocate of the US$10 trillion index investing universe.
In memory of the great investor, here are three facts about John Bogle that will live on in our memory.
A visionary who changed the world
John Bogle launched the world’s first index fund in 1974. He had seen the loopholes in the mutual fund world and believed in the merits of cheap, passive investing for the long term. Back then, passive investing was heavily derided by competitors and was dubbed “Bogle’s folly”.
However, Bogle was soon to have the last laugh. Besides outperforming 90% of mutual funds, index investing has also helped to enrich the lives of Vanguard’s customers and improved the lives of countless individuals.
Notably, the low-cost nature of the fund enriched its customers, more so than its founder or the fund manager. This was unprecedented in an industry that traditionally enriched the managers with unimaginable wealth.
Bogle was a visionary who changed the world and enriched countless individuals, all of which for a fraction of the returns that traditional mutual fund managers were making.
Admired by a legend
“If a statue is ever erected to honour the person who has done the most for American investors, the hands-down choice should be Jack Bogle.” Warren Buffett
Perhaps the greatest endorsement came from another legendary investor, Warren Buffett. Buffett was a keen admirer of the work of Jack Bogle and believed that he had enabled millions of American to achieve far better returns than they otherwise would have.
Buffett went so far as to make a US$1 million bet that investing in an index fund will bring better financial rewards than a portfolio of hand-picked hedged funds.
In 2017, when the bet ended, Buffett won the bet handsomely. Buffett’s index stock fund averaged 7.1% compounded compared to the 2.2% hedge fund basket. A true testament to Jack Bogle’s index investing strategy.
Wealth, philanthropy and awards
Despite amassing a fortune of around US$80 million, John Bogle was not a man who flaunts. He famously said, “What do I need a private jet for? I need my wife to drive me around. It doesn’t do my psyche any good to know that I have more than someone else.”
Bogle was a selfless man who continuously gave back to the community. During his high-earning years at Vanguard, Bogle regularly gave half his salary to charity, including Blair Academy and his alma mater Princeton.
In 1999, Bogle was named as one of four “Giants of the 20th Century” by Fortune magazine. In 2004, he was also named as one of the “world’s 100 most powerful and influential people” by Time magazine.
The Foolish bottom line
Bogle was truly an inspiration for the world. His generosity will always be remembered by the countless who benefitted. Thank you, Mr Bogle, for all that you have done for the investing community and the world.