Jack Bogle, who founded Vanguard Group, an investing juggernaut now with more than $5.1 trillion in assets under management, and created the world's first index mutual fund, has died. He was 89.
Bogle, who preached buy and hold investing, was considered one of the world's greatest investors. His index mutual fund enabled investors to achieve high returns but at lower costs than for actively managed funds.
He founded Vanguard, the world's largest mutual fund organization, in 1975, and later served as chairman and CEO until 1996. Vanguard now manages assets from more than 20 million investors in about 170 countries.
Bogle, whose personal fortune was a valued at relatively modest $80 million, had a history of cardiac problems, suffering the first of a half-dozen heart attacks at age 31 and undergoing a transplant at 65.
He wrote 13 books on investing, most recently the 2018 "Stay the Course: The Story of Vanguard and the Index Revolution." His devotees created an entire website based on his investing advice: Bogleheads.org.
"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," billionaire investor Warren Buffett wrote in his annual letter in March 2017. "In his early years, Jack was frequently mocked by the investment-management industry. Today, however, he has the satisfaction of knowing that he helped millions of investors realize far better returns on their savings than they otherwise would have earned. He is a hero to them and to me."
Bogle's primary philosophy was "common sense" investing. Indeed, two of his books used the phrase in their titles.
"Invest as efficiently as you can, using low-cost funds that can be bought and held for a lifetime. Don't go chasing past performance, but buy broad stock index and bond index funds, with your bond percentage roughly equaling your age," he told Reuters in 2012. "Most of all, you have to be disciplined and you have to save, even if you hate our current financial system. Because if you don't save, then you're guaranteed to end up with nothing."
John Clifton Bogle was born in Montclair, New Jersey, on May 8, 1929, along with twin brother David, to William and Josephine Bogle. The father lost much of the family's fortune in the Great Depression. According to Bogle, his father turned to drinking, and his parents eventually divorced.
The family's financial troubles during the Depression left an indelible impression on him.
"They were tough times, and I started working when I was 10 years old, delivering papers and eventually becoming a waiter," he said in 2012. "I learned you work for what you get, and I feel sorry for people who haven't had that upbringing."
"We lived with uncertainty," he added in a 2014 interview with The Sacramento Bee newspaper. "You learn at a very young age, you'd better roll up your sleeves. That's an eternal lesson. If you do not learn it, you're disadvantaged."
Bogle attended high school on the Jersey Shore before earning a scholarship to Blair Academy, a prestigious private school in the state. He graduated in 1947 and went on to Princeton.
"My love for Blair is pretty close to eternal," Bogle told students during a visit in spring 2018. "It was at Blair Academy that I learned to use the English language and how to write. My teachers spent so much time with me, mostly with a red pen. But I got better and better under their tutelage. The result is that my writing ability, among other things, enabled me to go to Princeton and start Vanguard and watch it grow into a colossus."
After Bogle graduated Princeton in 1951, he was hired by the Wellington Fund and rose to chairman in 1970. After engineering what he later termed "an extremely unwise merger" with the Boston investment counseling firm Thorndike, Doran, Paine & Lewis, he was fired in 1974. He would call the merger the biggest mistake of his life.
"I got wrapped up in the excitement of the go-go era, and the go-go era ended," Bogle recalled in a 2007 feature in Fortune. "As a result of that stupid decision, I got fired. The great thing about that mistake, which was shameful and inexcusable and a reflection of immaturity and confidence beyond what the facts justified, was that I learned a lot. And if I had not been fired then, there would not have been a Vanguard."
Vanguard actually started at Wellington. It was the name of a low-cost passive fund developed by Bogle and tied to the value of the S&P 500. He named it after Lord Nelson's ship in the Battle of the Nile against Napoleon.
He founded Vanguard as an independent, client-owned company in January 1975. With no outside owners sharing in profits and no sales commissions, it was able to offer low-cost investment services, including the first index mutual fund. In its first year, Vanguard managed $1.7 billion in investors' assets, in 2018, it was managing $5.1 trillion.
"It was never my intent to build a colossus. I'm a small-company kind of guy," he told an audience at Philadelphia's Jefferson Hospital on the 21st anniversary of his heart transplant there. "Turns out, when you do what's right for investors, money pours in."
Bogle resided in Bryn Mawr, Pennsylvania. Survivors include his wife, Eve, and six children.