It's Jack Bogle's World
Posted: Tue Apr 16, 2013 1:55 pm
Read the rest here.It's Jack Bogle's world. The rest of the asset management business is just living in it.
Fresh off setting a record for most net inflows in a single year, The Vanguard Group Inc., which Mr. Bogle founded in 1975, took in $53.6 billion in the first quarter, a single-quarter record for the Malvern, Pa.-based firm. It's also $15 billion more than was taken in by Pacific Investment Management Co. LLC, the second-best-selling mutual fund company in the first quarter, according to Lipper Inc.
Last year, Vanguard pulled in more than $138 billion, topping JPMorgan Chase & Co.'s record of $129 billion in net inflows for a single year in 2008.
“There're two things going on,”? said Mike Rawson, analyst at Morningstar Inc. “The primary driver has been the shift to low-cost passive investing. Vanguard has some of the lowest options available, so they've benefited from that. They also have a lot of good bonds funds, and investors have been clamoring for bonds.”?
Vanguard has been pounding home the message “low costs lead to better long-term results”? for almost 40 years, so it's no surprise to see them benefiting from a higher demand for passive investments.
But it isn't their cheerleading that's turned the tide, said Dan Wiener, editor of The Independent Adviser for Vanguard Investors.
“Interest in active management is fading because the press is fading on it,”? he said.
Can you blame the media when only one in four large-cap equity funds have beaten the S&P 500 over the 10-year period through 2012?
http://www.investmentnews.com/article/2 ... /130419954
Jack Bogle is without doubt one of the greatest investors of all time. And it is not an overstatement to call him the conscience of Wall Street. He should have gotten the Nobel Prize in economics for inventing the index fund. Without the ability to index stocks I don't think the PP would work very well.
