“The first sign that Vanguard’s mission has created a better world for the investor will be when our market share begins to erode,” Bogle told employees in a 1991 speech, when the company had less than 1 per cent of its assets today. He was so hardcore that his dream remains far from complete.
#CHARLES JETTISON BOOT FULL#
A better worldīogle’s story might seem like ancient history, or like it lacks a dramatic arc, yet it’s about what’s to come in finance – a future full of conflict and consequence. He could be savage and stubborn he received the boot at the only other place he ever worked, Wellington, and late in his career also tangled with Vanguard’s management. He’d give a speech at an ETF conference about why ETFs were awful, or trash active management at a conference for fund managers.
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His TV hits on business networks were mostly about the futility of trying to pick stocks or time the market. “In the history of Wall Street,” Michael Lewis, author of Liar’s Poker and The Big Short, told me, “the ratio of money touched to money taken was never so high.”īogle may have looked like a friendly grandfather, but throughout his career the words that left his mouth (and some that filled his bestselling investing books) were utterly punk rock. Bogle’s net worth was about $US80 million when he died, a fraction of what his peers in finance had amassed. Perhaps the most astonishing fact about Vanguard is that, though it manages more than a quarter of the assets in the entire fund industry, it accounts for only 5 per cent of the industry’s revenue. My study of Bogle and Vanguard culminates with my coming book, The Bogle Effect.īogle may have looked like a friendly grandfather, but throughout his career, the words that left his mouth were utterly punk rock. As an exchange-traded funds analyst for Bloomberg Intelligence, I spoke with Bogle many times, including in an interview six months before his death, with Joel Weber, the editor of Bloomberg Businessweek, for our Trillions podcast. The reason for Vanguard’s quiet dominance is both its unusual ownership structure and the unusual structure of its founder, John “Jack” Bogle, who died in 2019 at age 89.
The entire investing universe now bends towards the company’s headquarters in sleepy Malvern, Pennsylvania. Vanguard’s influence extends well beyond the numbers on any scoreboard. The money manager now has more than $US8 trillion ($11 trillion) in assets – second only to BlackRock, which it could surpass in a few years – as well as the three biggest funds in the world and another three in the top 10.
An asset manager owned by its investors? That invests in passive indexes? That charges only microscopic fees? That’s made millions of Americans fabulously wealthy and bankrolled countless retirements without succumbing to Wall Street?Ī young John Bogle, before he revolutionised asset management. For the past decade, while cryptocurrencies, Federal Reserve policy, meme stocks and Elon Musk have captured all the headlines, investors have been quietly funnelling a billion dollars a day into the greatest money-transfer machine in the history of capitalism: Vanguard.