The Vanguard Group
Morningstar Managing Director on John Bogle's 50th Anniversary

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.

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