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Kinnel: No One Has Done More For Investors Than Bogle

Both a mutually owned fund company and indexc funds might have been mere niche players in the industry had Bogle not stayed the course.

Vanguard founder Jack Bogle died today at the age of 89.

I can't think of anyone who has done more for investors than Bogle. A mutually owned fund company that would charge only at costs for investors was revolutionary. Index funds, pioneered by Bogle, were revolutionary.

Yet both might have been mere niche players in the industry had Bogle wavered. Instead, he stayed the course and built a stronger, better, cheaper firm. The power of staying faithful to a great idea is maybe the thing that separates Bogle from just about anyone else I can think of.

When you think how much money Bogle has made for investors, it's truly remarkable. A crucial reason Vanguard did so much for investors was its straight-talk approach. While the rest of the industry sold whatever had the hottest returns, Vanguard would throw cold water on investors, telling them that their best funds were due to cool off. They'd even close or raise minimums on hot funds until investors moved on.

Vanguard set expectations for investors so that they could use their funds correctly. I'll have more to share on his passing, but I wanted to share my first thoughts with you today.

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Russel Kinnel

Director
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Russel Kinnel is director of ratings, manager research, for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He heads the North American Medalist Rating Committee, which vets the Morningstar Medalist Rating™ for funds. He is the editor of Morningstar FundInvestor, a monthly newsletter, and has published a number of prominent studies of the fund industry covering subjects such as manager investment, expenses, and investor returns.

Since joining Morningstar in 1994, Kinnel has analyzed virtually every type of fund and has covered the most prominent fund families, including Fidelity, T. Rowe Price, and Vanguard. He has led studies on the predictive power of fund data and helped develop the Morningstar Rating for funds and the Morningstar Style Box methodology. He was co-author of the company's first book, Morningstar Guide to Mutual Funds: 5-Star Strategies for Success (Wiley, 2003), and was author of the book Fund Spy: Morningstar's Inside Secrets to Selecting Mutual Funds That Outperform, published in 2009.

Kinnel holds a bachelor's degree in economics and journalism from the University of Wisconsin.

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