INSUBCONTINENT EXCLUSIVE:
John Bogle, whose family's struggles during Great Depression led him to pioneer low-cost investing and to found Vanguard Group, now
world's biggest mutual fund firm, died on Wednesday at age of 89, Vanguard said.
Bogle had been in frail health for years, surviving at
least six heart attacks and receiving a heart transplant in 1996
The cause of death was cancer, according to Bogle's assistant Michael Nolan.
Despite ill health, Bogle was a vital presence through his
later years as he pressed for reforms in corporate governance and fund administration
He often mixed sharp rhetoric with a wry sense of humor and established a reputation as a curmudgeon in his industry, at times at odds with
Vanguard executives who eventually stripped him of much of his power within organization
Still Bogle, known widely as Jack, kept deep professional friendships and maintained a loyal following through his books and public
Some termed themselves "Bogleheads" in his honor and spread online his messages of thrift and investments in low-fee funds.
"Jack did more
for American investors as a whole than any individual I've known," billionaire Warren Buffett said in a statement.
At 2017 annual meeting of
his company Berkshire Hathaway Inc , which Bogle attended, Buffett estimated that by making low-cost index funds so popular for investors,
Bogle "put tens and tens and tens of billions of dollars into their pockets."
Bogle's life in many ways was opposite of his great fund
industry rival, Edward "Ned" Johnson III, who inherited control of Fidelity Investments in Boston from his father and employed star active
managers like Peter Lynch
Vanguard, in contrast, promoted low-cost index funds, products that Fidelity and rest of industry came to emulate.
"He made himself a
centurion to individual investor," said Charles Ellis, an industry consultant and a former Vanguard funds director
"He had one great message, about lowering fees, and he kept hammering away at it."
MODEST BEGINNINGS Bogle was born on May 8, 1929, to a
family of modest means in Montclair, New Jersey, and graduated from Princeton University in 1951, working his way through college as a
His economics thesis there earned him a job from an older Princeton alumnus at Wellington Management Co in Philadelphia
Bogle rose through ranks and persuaded company to start offering more mutual funds, even as he suffered his first heart attack at age of
He had a pacemaker installed in 1967 to treat a condition known as heart arrhythmia
He created Vanguard in 1974 after a dispute with others at Wellington, and built its products around a new economic model in which funds
would be run by their own directors and staff rather than by an external management company.
In 1976, Vanguard also introduced first indexed
fund for individual investors
According to company, it was initially ridiculed as "un-American" but now Vanguard 500 Index Fund is one of industry's largest
Vanguard has some $5 trillion in assets under management, bulk of it in index funds and exchange-traded funds.
Dan Wiener, who runs a
newsletter for Vanguard investors, recounted how Bogle once sued him after he disclosed details of Bogle's compensation, and said Bogle
could have a thin skin about material that did not "paint Vanguard as a virtuous non-profit."
But Wiener said that when he sent a note
wishing Bogle well after a 1996 heart transplant, Bogle responded "in guise of one of his doctors, who noted that my email had raised his
heart rate and that I should refrain from further emails until he was recovered
When I later found out we had a good laugh, at my expense."
Even as Bogle's health declined in his later years he remained a combative
public presence, arguing that larger fund companies had grown too focused on their own profit rather than serving as stewards of their
clients' interests, including pressing corporations for better governance
"The mutual fund industry lost its way because of triumph of managers' capitalism over owners' capitalism," Bogle wrote in a typically
fiery passage in his 2005 book "The Battle for Soul of Capitalism."
