John Bogle remembered as the 'patron saint' of the investing business

Prominent investors and financial industry executives weigh in on the legacy of the Vanguard Group founder

Jan 17, 2019 @ 10:49 am

By Bloomberg News

John Bogle turned investing upside down.

By founding Vanguard Group, and persisting through the disappointing early years of running the first index mutual fund available to individual investors, he ended up slashing fees paid by hundreds of millions of regular people.

Mr. Bogle, who died Wednesday at age 89, also squeezed profit margins on Wall Street, which he loudly and persistently criticized for treating investors poorly. In the end, fund investors may save more than $1 trillion thanks to Mr. Bogle's efforts, according to calculations by Bloomberg ETF analyst Eric Balchunas in 2016.

Bloomberg News asked prominent investors and executives who knew Mr. Bogle to weigh in on both his legacy and personality. Here's what they remembered:

David Swensen, chief investment officer at Yale University

"Jack Bogle transformed the world for individual investors by providing a safe haven for their assets. Starting with an idea (articulated in his senior thesis at Princeton), Jack created Vanguard, which today manages trillions of dollars of assets, driven by fiduciary responsibility to millions of participants, not by profits.

Working tirelessly to educate the public on the virtues of long-term investment in low-cost, broad-based index funds, Jack did more to advance the interests of individual investors than any person in history. He was my friend and my hero."

Charles Schwab, chairman and founder of Charles Schwab Corp.

"Jack was a pioneer who brought the wisdom of low-cost, long-term investing to millions of people since founding Vanguard and extolling the power of index investing. Like all pioneers, he pushed into new territories, and we're all better off because of it."

Jeremy Grantham, co-founder of GMO

"What he meant to most people in the investment business was that he was a royal pain in the bottom. In a world where increasingly everyone is trying to maximize short-term profits, he was a complete outlier. He was more concerned about the long-term benefits for society. There were so few in that group. And he was the patron saint.

His approach was, 'How cheaply can we do this?' He made up his mind and pursued it with outrageously dogged, fixed focus. You didn't necessarily want to get in his way. I never got in his way. I watched his slow, painful start at Vanguard and then the steady success. I always thought it was inevitable that, if they steadily followed that path, they would win."

David Solomon, CEO of Goldman Sachs

"Jack Bogle was a pioneer. He helped millions of people achieve a better financial future for themselves and their families, and he made everyone who makes a living in the markets think seriously about what excellence in this business is all about."

Howard Marks, co-founder of Oaktree Capital Group

"His decision to make Vanguard a client-owned firm that would keep expenses low and charge below average fees was revolutionary. His formation of the first significant index fund initiated the movement toward passive portfolio management, one of the most important trends in the industry over the last two decades. And his candor and integrity set standards that inspire Oaktree and me to this day. It was a great privilege to associate with Jack Bogle."

Bill Gross, portfolio manager at Janus Henderson

"He was a giant in the past half century of investment strategy — not because he knew which way markets were headed at any one time, but because he hectored Wall Street and encouraged investors to keep more of what they earned. Egregious fees were his enemy and index funds were his solution.

While I still remain an advocate of active management, there is no doubt that indexing at much lower fees will outperform almost all managers over a long period of time. Both his old and his new hearts were always with the small investor as opposed to Wall Street."

Steve Schwarzman, CEO of Blackstone Group

"Jack revolutionized investing in public securities."

Sallie Krawcheck, CEO of Ellevest

"It's certainly the end of an era. Everyone in the industry today is standing on the shoulders of that giant. In addition to building his own company and being an innovator in the industry, he also played the role of its conscience."

Mohamed El-Erian, chief economic adviser at Allianz

"He will be remembered not only for leaving a huge mark on the investment management industry that will continue to benefit many investors for a long time, but also for his admirable graciousness, impressive wit, strong communication skills and consistent thoughtfulness."

Brian Moynihan, CEO of Bank of America

"He was a great American innovator who taught us the wisdom of long-term thinking. We will miss him."

Rob Arnott, founder of Research Affiliates

"He was one of the greats. We had our professional disagreements. He was not a fan of smart beta. He was not a fan of fundamental indexing. But we were good friends. We'd talk about disruptors. He was as disruptive to the investment business as Steve Jobs was to the computer world.

He wasn't the first to do an index fund but he was the first to do it in a fashion that regular people could invest in. It was a tremendous innovation and it reshaped the industry. He loved stirring the pot. He loved being contrarian. He loved challenging people."

Bill Miller, founder of Miller Value Partners

"Jack created more wealth for more people than anyone in the history of investing and probably in its future as well. He combined great originality, drive and moral purpose with unusual kindness, compassion and a sense of duty. He was always a gentleman and combined two traits rarely seen together: exceptional competitiveness and no ego. I feel honored to have known him."

Arthur Levitt, former SEC chairman

"He stood for everything good in the business community. He was dedicated first and foremost to numbers that were clear, precise and reliable. I know of no one in the business community who was his equal."

Cliff Asness, founder and chief investment officer, AQR Capital

"Very sad day. The world lost a giant and I lost my hero. Nobody has ever done more for investors, and asked less for himself, than Jack Bogle."

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