Jack Bogle Was Such a Punk

A new book shows how radical Vanguard's founder was-and that his mission has just begun

- Eric Balchunas

For the past decade, while cryptocurrencies, Fed policy, meme stocks, and Elon Musk have captured all the headlines, investors have been quietly funneling a billion dollars a day into the greatest money-transfer machine in the history of capitalism: Vanguard. Yet the company shouldn't even exist. An asset manager owned by its investors? That invests in passive indexes? That charges only microscopic fees? That's made millions of Americans fabulously wealthy and bankrolled countless retirements without succumbing to Wall Street?

The money manager now has more than $8 trillion in assets-second only to BlackRock, which it could surpass in a few years-as well as the three biggest funds in the world and another three in the top 10. Vanguard's influence extends well beyond the numbers on any scoreboard. The entire investing universe now bends toward the company's headquarters in sleepy Malvern, Pa.

The reason for Vanguard's quiet dominance is both its unusual ownership structure and the unusual structure of its founder, Jack Bogle, who passed away in 2019 at age 89. As an exchange-traded funds analyst for Bloomberg Intelligence, I spoke with Bogle many times, including in an interview six months before his death, with Joel Weber, the editor of Bloomberg Businessweek, for our Trillions podcast. My study of Bogle and Vanguard culminates with my forthcoming book, The Bogle Effect.

Perhaps the most astonishing fact about Vanguard is that, though it manages more than a quarter of the assets in the entire fund industry, it accounts for only 5% of the industry's revenue. Bogle's net worth was about $80 million when he died, a fraction of what his peers in finance had amassed. "In the history of Wall Street," Michael Lewis, author of Liar's Poker and The Big Short, told me, "the ratio of Anny money touched to money taken was never so high."