John Clifton Bogle, founder of The Vanguard Group, died today in Bryn Mawr, Pa., announced The Vanguard Group. He was 89.
The cause of his death was cancer, according to the Philadelphia Inquirer. He suffered the first of at least six heart attacks at age 31. In 1967 he had a pacemaker installed, and in 1996 he received a heart transplant.
Bogle had legendary status in the American investment community, largely because of two towering achievements: He introduced the first index mutual fund for investors and, in the face of skeptics, stood behind the concept until it gained widespread acceptance; and he drove down costs across the mutual fund industry by ceaselessly campaigning in the interests of investors. Vanguard, the company he founded to embody his philosophy, is now one of the largest investment management firms in the world.
“Jack Bogle made an impact on not only the entire investment industry, but more importantly, on the lives of countless individuals saving for their futures or their children’s futures,” said Vanguard CEO Tim Buckley in a prepared statement. “He was a tremendously intelligent, driven, and talented visionary whose ideas completely changed the way we invest. We are honored to continue his legacy of giving every investor ‘a fair shake.’”
Bogle’s formula turned Vanguard into the largest U.S. manager of stock and bond funds.
“He was a towering figure,” Burton Malkiel, a Princeton University economics professor and Vanguard board member since 1977, said in an interview. “The mutual-funds industry is infinitely better because of Jack Bogle.”
A champion of the individual investor, Bogle is widely credited with helping to bring increased disclosure about mutual fund costs and performance to the public. His commitment to safeguarding investors' interests often prompted him to speak out against practices that were common among his peers in other mutual fund organizations.
“The mutual-fund industry is now dominated by giant, publicly held financial conglomerates run by businessmen hell bent on earning a return on the firm’s capital, not the return on the capital invested by the fund shareholders,” Bogle said in a 2006 speech at the Free Library of Philadelphia.
He told Bloomberg Television in December 2008 that the U.S. government’s bailouts of companies including American International Group Inc. and Citigroup Inc. had “deeply discredited” capitalism. At a February 2009 congressional hearing, he warned that the U.S. retirement system “is imperiled, headed for a serious train wreck.” Months later he filed a brief with the U.S. Supreme Court siding with investors who were challenging fees charged by fund managers.
At industry events and other public appearances, Bogle often drew admirers while making fund company executives uncomfortable. Some fans called him “St. Jack of the mutual-fund industry.”