Skip to Content
Premium Article

Active Funds Even Vanguard's Bogle Could Like

Offerings even the hard-to-please indexing advocate might approve.

Mentioned: , , , , , , , , ,

Ask John C. Bogle, founder of the Vanguard Group, an obvious question like, "What kind of mutual fund should I invest in?" and you are sure to get an obvious answer: "Buy an index fund and hang on to it forever." Indeed, the tireless evangelist for low-cost funds that track broad market indexes has said it, over and over in books, speeches, media interviews, and just about everywhere else he has appeared.

Even Bogle, however, realizes he can't win over everyone. Many people, out of hubris or just for thrills, will always hunt for market-beating funds. So, in his classic book Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor, Bogle laid out some rules for those who shop for actively-managed mutual funds. Bogle's formula stresses consistently performing funds with low costs, experienced managers, and low portfolio turnover. "Simplicity, indeed, is the master key to financial success," he wrote.

This article is exclusive to Morningstar Premium members.

Start a 14-Day Free Trial

Dan Culloton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.