As a tribute to Bogle’s lasting reputation, the majority of the investing public reported being knowledgeable about the concept of index funds (59%). Not surprisingly, more Vanguard investors are familiar with the concept (75%).
Two of the principles Bogle championed, investing for the long term and diversifying investments, were named as being important to investors. Fifty-seven percent of non-Vanguard investors named long-term investing as important and 53% named diversification, the survey found. Vanguard investors agree even more; 70% named the importance of investing for the long term, and using a diversified portfolio was named by 64% of Vanguard investors.
“Bogle’s legacy extends far beyond Vanguard,” said Derek Horstmeyer, associate professor of finance at George Mason University. “Vanguard was the first mover in index funds, but this caused all other mutual fund families to follow suit. Now all major mutual fund families offer index funds with costs that are approaching 0% a year in expense ratios.
“Because of the index fund revolution that Bogle started, the average actively managed fund has had to reduce their fees by 50% over the past 20 years,” Horstmeyer added.