Bogle, who founded Vanguard based on his investing principles, understood early on that high costs can undermine even the best performing fund. Always be in at a certain level," he said. Das Beste aus zwei Welten:
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AP -- John C. Bogle, who simplified investing for the masses by launching the first index mutual fund and founded Vanguard Group, died Wednesday, the company said. Bogle did not invent the index fund, but he expanded access to no-frills, low-cost investing in when Vanguard introduced the first index fund for individual investors, rather than institutional clients. More often than not, the higher operating expenses that fund managers pass on to their shareholders cancel out any edge they may achieve through expert stock-picking.
Bogle and Vanguard shook up the industry further in The company ended its reliance on outside brokers and instead began directly marketing its funds to investors without charging upfront fees known as sales loads. Bogle served as Vanguard's chairman and CEO from its founding until He stepped down as senior chairman in , but remained a critic of the fund industry and Wall Street, writing books, delivering speeches and running the Bogle Financial Markets Research Center.
The advent of index funds accelerated a long-term decline in fund fees and fostered greater competition in the industry. Investors paid 40 percent less in fees for each dollar invested in stock mutual funds during than they did at the start of the millennium, for example. But Bogle continued to maintain that many funds were overcharging investors, and once called the industry "the poster-boy for one of the most baneful chapters in the modern history of capitalism.
Bogle also believed that the corporate structure of most fund companies poses an inherent conflict of interest, because a public fund company could put the interests of investors in its stock ahead of those owning shares of its mutual funds. Vanguard has a unique corporate structure in which its mutual funds and fund shareholders are the corporation's "owners.
It helped usher in a new era of investing, and index funds have increasingly become the default choice for investors. Vanguard offers both index and managed funds, but remains best-known for its index offerings. Vanguard's original index fund, now known as the Vanguard Index, is no longer the company's biggest, but remains among the company's lowest-cost funds. Bogle spent the first part of his career at Wellington Management Co.
He rose through the ranks and, in his mids, was tapped to run Wellington. Throughout his life, Bogle fought for the small investor, not wavering in his belief that a low-fee portfolio buying all the securities in an index and held long term would outperform the average actively managed fund. And he was proven right. Its average expense ratio, the annual cost paid for money management, is 0. Bogle, who founded Vanguard based on his investing principles, understood early on that high costs can undermine even the best performing fund.
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, who had attracted a horde of fans known as Bogleheads, was named in among the 25 most influential business leaders of the time by Knowledge Wharton and the Nightly Business Report.
Lessons from these leaders resulted in a book called Lasting Leadership. Bogle also discussed the stock market and corporate reform with Wharton finance professor Jeremy Siegel in a Knowledge Wharton article two years earlier. In , while the country was at war, unemployment was up and the economy was teetering, Bogle gave this advice to investors: