John C. Bogle

John C. Bogle graduated from Princeton University in 1951, where his senior thesis argued that mutual funds could not consistently outperform the market and that their high costs were a drag on investor returns. He went to work for Wellington Management, eventually becoming its CEO, before founding the Vanguard Group in 1974 following a merger dispute. Vanguard was structured as a mutual ownership company — owned by the funds themselves, and thus by shareholders — with no external profit motive, allowing it to pursue the lowest possible costs as a business objective. In 1976 he launched the Vanguard 500 Index Fund, the first publicly available index mutual fund tracking the S&P 500, which was ridiculed by competitors as "Bogle's Folly" at launch. The logic was simple: since the average actively managed fund necessarily underperforms the market index by its management fee plus transaction costs, a low-cost index fund must outperform the average active manager over time. This argument — supported by decades of empirical evidence — proved correct, and the shift to passive investing it inspired has been one of the most significant transformations in financial history. Vanguard grew to manage over $8 trillion in assets, becoming the world's second-largest asset manager. Bogle's crusade against high fund fees has transferred hundreds of billions of dollars from the financial industry to ordinary investors. His books, including "The Little Book of Common Sense Investing" (2007), have sold millions of copies. He passed away in January 2019.