John C. “Jack” Bogle, a towering figure in finance who revolutionized American investment with his invention of the index fund, died Wednesday in Bryn Mawr, Pa. He was 89.
The announcement was made by the Malvern, Pa.-based Vanguard Group, the $5 trillion mutual fund organization he founded in 1974. No cause of death was reported.
He had been diagnosed with an erratic heartbeat as a young man, had his first of six heart attacks at 31 and underwent a heart transplant at 66.
“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 news release accompanying the announcement.
Bogle, a pioneer known as “the father of index funds,” was a contrarian who took on Wall Street and the investment community through his advocacy of the cost-efficient index fund, which was widely ridiculed by stock pickers but came to dominate the investing world.
The concept, which began as his senior thesis at Princeton University, was simple: a tiny percentage of stock pickers can beat the Standard & Poor’s 500 over a long period of time. Index funds own broad holdings meant to mimic the market indices.
They do not seek to outperform the market by trying to pick winners, but they own stocks that represent a given market.
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It is better, and cheaper, Bogle said, for investors to own a basket of stocks that echo the S&P 500.
“Don’t look for the needle in the haystack,” Bogle wrote in 2007’s “The Little Book of Common Sense Investing.” “Just buy the haystack.”
Vanguard is now one of the world’s largest investment management companies, with $4.9 trillion in assets in 413 funds serving 20 million investors across the globe.