Morningstar Direct Talk
Don Phillips, Managing Director
July 3, 2001
Fifty years ago this month a newly minted Princeton
graduate named Jack Bogle joined Wellington Management Company.
It was the start of one of the most remarkable careers in finance.
Bogle, of course, would go on to found the Vanguard Group of Investment
Companies, to launch and popularize the first retail index fund,
and to be a tireless champion of investor interests. In an industry
whose very foundation is based on the public's trust, no man has
done more to earn the goodwill of the American public. He has become,
in the eyes of many, a true national treasure.
Oddly, Bogle doesn't seem to be held in the same high
regard within the fund industry as he is in the general public.
Given his immense contributions to the fund management business,
one would have thought that he'd have been center stage this past
May at the Investment Company Institute's (ICI) General Membership
Meeting. What a splendid opportunity to celebrate Bogle's 50 years
in the business and to share his accumulated wisdom with the next
generation of men and women who will act in stewardship of the public's
trust. Indeed, for a conference whose self-selected mission was
"to emphasize topics essential and timely to the investor, and thus
core to fulfilling our responsibilities as an industry," you could
have no more appropriate speaker than Jack Bogle.
Sadly, today's fund leaders didn't see it that way.
Rather than showcase a man who truly has challenged the industry
to fulfill its responsibilities, the conference organizers chose
to feature a McKinsey consultant discussing the pressures of global
competition, a woman who wrote a book about Antarctic explorers,
and political commentators James Carville and Newt Gingrich. Among
the topics the ICI deemed "essential and timely" for investors were
sessions on how fund companies could better "leverage their brand
value" and could ease the "facilitation of cross-border marketing
of funds in Europe." While these things may be valuable to enhancing
fund-company profits, they hardly meet the stated mission of the
conference. You can bet that Bogle would not have confused the industry's
responsibility to investors with its desire for increased profitability.
It's shameful that Jack Bogle should find himself
on the outside of his field looking in, even though both he and
the public know he should still command center stage. No single
person has done more to establish the credibility of the mutual
fund industry than has Bogle. He is, in a very real sense, the most
valuable asset the fund industry has. How ironic it is that an industry
entrusted with the stewardship of the public's assets would so thoughtlessly
squander one of its own.
Copyright © 2001 by Morningstar FundInvestor.
Reprinted by permission.
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