investors speak their mind on jack bogle’s legacy · the investing public values jack bogle’s...

Investors Speak Their Mind on

Jack Bogle’s Legacy

January 16, 2020

1

Purpose & Approach

• In the finance and mutual fund industry, Vanguard founder John C. (Jack) Bogle, who passed away January 16, 2019, was well known. He was highly respected by many business and political leaders. What is not known is how widely known and well regarded among investors -- 19 years after stepping down from Vanguard.

• The Institute for the Fiduciary Standard seeks to document the legacy of Jack Bogle through the eyes of those he sought to serve – ordinary investors. This survey of both Vanguard investors and the investing public set out to do so. This survey sought to measure investor attitudes regarding: Jack Bogle and other successful leaders in finance and business; Vanguard and other financial services firms; and their awareness of and respect for the basic investment tenets on which Jack Bogle built Vanguard and espoused throughout his life.

• Rockland Dutton Research & Consulting fielded an online survey among investors in the United States. The survey

was completed by 500 Vanguard investors and 500 investors among the general public, all ages 25 and older, with at

least $100k in invested assets, in the first two weeks of October 2019. Vanguard investors who participated in the

survey were pre-screened on the basis that Vanguard is one of their primary funds. It should be noted that with the

general public investors, some have or do hold Vanguard funds consistent with their prevalence among investors

throughout the U.S.

• The data collection was subcontracted to Research Now/SSI, now called Dynata.

2

What This Study Found About


1. Jack Bogle is not, as Bloomberg noted, a household name by the investing public. However, to those who do know him, his reputation is stellar, consistent with the country’s better known and hugely successful investor, Warren Buffett, and Bill Gates, arguably the most successful and prominent business executive of the past 40 years. In comparison, both Steve Jobs and Chuck Schwab lag behind Bogle, Buffett and Gates.

2. The investing public views the reputations of Apple and Vanguard similarly -- at about 41% in this survey in terms of being very high. Microsoft, Schwab, Merrill Lynch follow at 36%, 32% and 25% respectively.

3. The investing public hears and understands the principles Jack Bogle espoused. This survey finds that investors value low cost and diversified index mutual funds for the long term. Index funds are widely seen as very positive. They offer lower costs, eliminate certain risks, improve returns, and enhance transparency. While the investing public values Jack Bogle’s investing principles, Vanguard investors do so even more.

4. For the investing public, Bogle’s legacy is best described as, “Investing in the entire market with low cost index funds is better than stock picking.” The second place legacy theme speaks to Jack Bogle’s passion to help investors make better decisions. Investors return the compliment saying, he “Made investing understandable.”

3

The Reputation of Jack Bogle

4

Among the General Investing Public more than 35% Know Jack Bogle

General Investing Public Vanguard Investors

5

10.6%, A lot

23.2%, Some

24.0%, Only a little

18.6%, Have just heard the

name

23.8%, Never heard of him

Knowledge of Jack Bogle

Q19. How much do you know about Jack Bogle, the founder and former chairman of Vanguard?

9.0%, A lot

13.4%, Some

13.8%, Only a little

13.0%, Have just heard the

name

50.8%, Never heard of him

Knowledge of Jack Bogle

• Nineteen years after exiting Vanguard, half of the investing public has heard of Jack Bogle;

this compares with 76% of Vanguard investors

Of Those Who Know of Him Among the Public, Views of Jack Bogle are Widely

Favorable, 60.5% to 0.3% -- and 38% Neutral

Vanguard Investors

6

36.6%, Extremely favorable

40.1%, Mostly favorable

23.0%, Neutral

Extremely unfavorable

0.3%

View of Jack Bogle

0% selected “Mostly unfavorable”

Q20. Is your view of Jack Bogle…?

28.0%, Extremely favorable

32.5%, Mostly favorable

38.2%, Neutral

Mostly unfavorable

0.3%

View of Jack Bogle

0% selected “Extremely

unfavorable”

General Investing Public

Among the Investing Public, Jack Bogle’s General Familiarity is Far Lower Than

Luminaries such as Warren Buffett and Bill Gates General Investing Public Vanguard Investors

7

34.7%

36.5%

62.3%

73.5%

76.4%

77.0%

79.6%

81.0%

0% 20% 40% 60% 80% 100%

Jack Bogle

Chuck Schwab

Michael Bloomberg

Mark Zuckerberg

Warren Buffett

Steve Jobs

John McCain

Bill Gates

Very/Somewhat Familiar


20.0%

38.4%

53.6%

66.4%

66.8%

67.6%

71.0%

72.4%

0% 20% 40% 60% 80%

Jack Bogle

Chuck Schwab

Michael Bloomberg

Warren Buffett

Steve Jobs

Mark Zuckerberg

John McCain

Bill Gates



Q8. How familiar are you with each of the following individuals – very familiar, somewhat familiar, only a little familiar, have only just heard

the name, or have never heard of this person?

Very

40.4%

38.4%

33.2%

36.0%

32.0%

25.8%

15.8%

9.4%

Very

37.1%

39.!%

32.7%

34.1%

29.9%

24.8%

12.8%

16.8%

Jack Bogle’s familiarity with the public is overshadowed by business leaders whose name is inseparable from their firm’s name

Yet, Jack Bogle Ranks at the Very Top with Warren Buffett and Bill Gates for his Excellent

Reputation among the General Investing Public who are Familiar with his Name


8

9.1%

20.3%

23.4%

29.1%

38.4%

46.6%

54.2%

60.3%

0% 20% 40% 60% 80%

Mark Zuckerberg

Michael Bloomberg

Chuck Schwab

Steve Jobs

John McCain

Bill Gates

Warren Buffett

Jack Bogle

Very High Reputation (9-10 Responses)

Very High Reputation (9-10)

19.1%

26.0%

31.1%

38.7%

42.4%

51.0%

51.3%

51.7%

0% 20% 40% 60%

Mark Zuckerberg

Michael Bloomberg

Chuck Schwab

Steve Jobs

John McCain

Bill Gates

Warren Buffett

Jack Bogle



Q9. On a scale of 1 to 10, where 1 is poor and 10 is excellent, to the best of your knowledge how would you rate the reputation of each of

these individuals? Asked of those very, somewhat or a little familiar with Jack Bogle.

Avg.

8.0

8.2

8.2

7.5

7.7

7.5

6.7

5.7

Avg.

8.4

8.3

8.1

7.4

7.4

7.2

6.7

5.2

The More Familiar Investors are With Jack Bogle, The More They Respect Him


9

47.9%, Promoters (9-10 responses)

37.2%, Passives (7-8 responses)

15.0%, Detractors (1-6 responses)

Respect for Jack Bogle

Q22. How much do you respect Jack Bogle as a knowledgeable, authoritative voice for investing, on a scale of 1 to 10 where 1 is no

respect at all and 10 is great respect?

42.3%, Promoters (9-10 responses)

29.3%, Passives (7-8 responses)

28.5%, Detractors (1-6 responses)

Respect for Jack Bogle

This question differs slightly from Question 8 which is about familiarity, but the results are highly comparable

For Those Who Know Jack Bogle, Keeping Investment Costs Low and Long Term Investing are

The Most Important Principles He Advanced:

Vanguard Investors See all His Principles Even More Favorably


10

45.0%

50.5%

51.0%

56.5%

68.6%

0% 20% 40% 60% 80% 100%

Risks and costs of market timingreduces returns

Diversify investments by buyingentire market

Indexing is better than activemanagement

Buy and hold investments long-term

Keep investing costs as low aspossible

A great deal

Q23. How much was Jack Bogle a leader in the mutual fund industry for advancing these principles? – a great deal, some, not much or

not at all.

37.4%

38.2%

39.8%

47.2%

47.6%

0% 20% 40% 60% 80% 100%

Indexing is better than activemanagement

Risks and costs of market timingreduces returns

Diversify investments by buyingentire market

Buy and hold investments long-term

Keep investing costs as low aspossible

A great deal

• Among the general public, those who responded not much or not at all ranged from 9-13% and for Vanguard investors 3-7%

Company Reputations

11

Familiarity with Vanguard Similar to Schwab and Merrill Lynch Among the

Investing Public


12

42.1%

49.5%

50.7%

75.2%

78.6%

81.6%

97.6%

0% 20% 40% 60% 80% 100%

Berkshire Hathaway

Merrill Lynch

Charles Schwab

Facebook

Apple

Microsoft

Vanguard


Very/Somwhat Familiar

35.0%

50.6%

52.4%

54.2%

73.4%

73.6%

74.0%

0% 20% 40% 60% 80% 100%

Berkshire Hathaway

Charles Schwab

Merrill Lynch

Vanguard

Facebook

Apple

Microsoft


Very/Somwhat Familiar

Q4. How familiar are you with each of the following companies – very familiar, somewhat familiar, only a little familiar, have only just heard the

name, or have never heard of this company?

Very

43.6%

45.6%

45.4%

26.0%

22.6%

26.8%

15.2%

Very

80.4%

43.5%

43.5%

44.1%

19.8%

17.0%

16.0%

High Familiarity and High Reputation Ratings Are Not Always Related


13

16.3%

22.3%

43.3%

72.7%

49.5%

50.7%

42.1%

97.6%

0% 20% 40% 60% 80% 100%

Merrill Lynch

Charles Schwab

BerkshireHathaway

Vanguard

Reputation vs. Awareness

Very/Somewhat Familiar Very High Reputation (9-10)

24.8%

31.5%

40.7%

46.9%

52.4%

50.6%

54.2%

35.0%

0% 20% 40% 60% 80% 100%

Merrill Lynch

Charles Schwab

Vanguard

BerkshireHathaway

Reputation vs. Awareness

Very/Somewhat Familiar Very High Reputation (9-10)

Q5. On a scale of 1 to 10, where 1 is poor and 10 is excellent, to the best of your knowledge how would you rate the reputation of each of the following

companies?

For the Investing Public, When It Comes to Putting Customer Interests First

Vanguard is at the Top while Merrill Lags Behind


14

16.3%

22.3%

72.7%

0% 20% 40% 60% 80% 100%

Merrill Lynch

Charles Schwab

Vanguard

Respect as Customer-First Investment Company

Very High Respect (9-10)

25.6%

32.9%

36.9%

0% 20% 40% 60% 80% 100%

Merrill Lynch

Charles Schwab

Vanguard

Respect as Customer-First Investment Company

Very High Respect (9-10)

Q7. How much do you respect each of the following as an investment company that puts customers’ interests first, on a scale of 1 to 10

where 1 is no respect at all and 10 is great respect?

Among the Investing Public, Vanguard’s Reputation Parallels that of Apple and is

Higher than Charles Schwab and Merrill Lynch


15

8.6%

16.3%

22.3%

32.4%

38.7%

43.3%

72.7%

0% 20% 40% 60% 80%

Facebook

Merrill Lynch

Charles Schwab

Microsoft

Apple

Berkshire Hathaway

Vanguard



18.3%

24.8%

31.5%

35.9%

40.7%

40.8%

46.9%

0% 20% 40% 60% 80%

Facebook

Merrill Lynch

Charles Schwab

Microsoft

Vanguard

Apple

Berkshire Hathaway



Q5. On a scale of 1 to 10, where 1 is poor and 10 is excellent, to the best of your knowledge how would you rate the reputation of each of

the following companies?

Avg.

8.0

7.9

7.9

7.8

7.6

7.1

5.6

Avg.

9.0

8.0

7.6

7.5

7.1

6.5

5.1

For the general public investors, Berkshire Hathaway is on top; Vanguard’s reputation outranks Charles Schwab and Merrill Lynch

Principles Jack Bogle Espoused

16

Importance of Jack Bogle’s Investment Principles are Ranked High*


17

32.5%

39.3%

40.9%

63.7%

63.9%

69.5%

0% 20% 40% 60% 80%

Researching individual companies

Past performance

Keeping it simple

Minimizing costs

Diversifying

Investing long term

Very Important to Investing In Mutual Funds(9-10 Responses)

32.6%

35.0%

39.0%

46.2%

53.2%

57.4%

0% 20% 40% 60% 80%

Researching Individual Companies

Keeping it simple

Past performance

Minimizing costs

Diversifying

Investing long term

Very Important to Investing In Mutual Funds (9-10 Responses)

Q11. Now, using a scale of 1 to 10, where 1 is not important at all and 10 is very important please rank the importance of each of these

factors to you when it comes to investing in mutual funds. If you don’t know enough to say, please indicate that by checking N/A.

Avg.

8.5

8.5

8.1

8.0

7.7

7.4

Avg.

9.0

8.8

8.7

8.0

7.8

7.2

*Green refers to what Jack Bogle encouraged, Red are things he discouraged

Investment Priorities Ranked by Those Who Are Knowledgeable

About Jack Bogle

18


OverallKnow A

lot/Some About

Jack Bogle

Know a

little/only heard

name/never

heard of

OverallKnow A

lot/Some About

Jack Bogle

Know a

little/only heard

name/never

heard of

Investing long term 57.4% 70.5% 53.6% 69.5% 72.2% 68.1%

Diversifying 53.2% 62.5% 50.5% 63.9% 69.2% 61.1%

Minimizing costs 46.2% 67.0% 40.2% 63.7% 71.6% 59.6%

Keeping it simple 35.0% 64.3% 26.5% 40.9% 47.9% 37.3%

Past performance 39.0% 52.7% 35.1% 39.3% 30.2% 44.0%

Researching individual companies 32.6% 58.0% 25.3% 32.5% 37.3% 30.1%

Q11. Now, using a scale of 1 to 10, where 1 is not important at all and 10 is very important please rank the importance of each of these

factors to you when it comes to investing in mutual funds. If you don’t know enough to say, please indicate that by checking N/A.

• Vanguard Investors More Knowledgeable

And More Correct About Ignoring Past

Performance

Diversifying, Investing for the Long-term and Minimizing Costs Increasingly

Important to Investors Today


19

71.5%

65.1%

63.3%

65.7%

60.7%

61.9%

11.6%

15.8%

8.2%

5.2%

5.8%

4.4%

17.0%

19.2%

28.5%

29.1%

33.5%

33.7%

0% 10% 20% 30% 40% 50% 60% 70%

Past performance


Keeping it simple

Investing long term

Diversifying

Minimizing costs

Increased Decreased Stayed the Same

Q12. Has your emphasis on each of these factors increased, decreased, or stayed the same in the last 10 years?

67.6%

63.8%

63.0%

63.8%

62.0%

59.6%

12.0%

12.6%

12.2%

8.2%

9.0%

7.8%

20.4%

23.6%

24.8%

28.0%

29.0%

32.6%

0% 10% 20% 30% 40% 50% 60% 70%

Past performance


Keeping it simple

Minimizing costs

Investing long term

Diversifying

Increased Decreased Stayed the Same

Index Funds

20

Knowledge of Mutual Funds is High; Higher among Vanguard Investors


21

12.8%, Extremely

29.9%, Very

47.5%, Somewhat

8.8%, Not very

1.0%, Not at all

Knowledge of Mutual Funds

12.8%, Extremely

21.6%, Very

41.8%, Somewhat

17.2%, Not very

6.6%, Not at all

Knowledge of Mutual Funds

Q10. How would you rate your knowledge of investing in mutual funds? Are you…?

Investing Public and Vanguard Investors Report Being Knowledgeable About

Index Funds


22

11.6%, Extremely

24.0%, Very

39.7%, Somewhat

18.4%, Not very

6.4%, Not at all

Knowledge of Index Funds

Q13. How would you rate your knowledge of index funds, specifically? Are you…

Extremely, 9.2%

Very, 20.2%

Somewhat, 29.6%

Not very, 22.8%

Not at all , 18.2%

Knowledge of Index Funds

• Vanguard Investors say they feel more knowledgeable (somewhat, very, extremely) about index funds (75.3%) as compared to the

general investing public (59.0%).

Index Funds Generally Seen as Having a Positive Impact in Investing


28.7%, Very positive

57.1%, Somewhat

positive

6.4%, Somewhat negative

1.4%, Very negative

6.4%, Not at all

Impact of Index Funds on an Individual’s Investments

Q14. Passively managed index funds are funds that track a group or bucket of stocks and/or bonds. For example, index funds designed to

track the Standard and Poor’s 500 mirror the risk and return of the entire stock market at a very low cost. What kind of impact do you think

index funds have had on the way individuals invest, if any?

19.0%, Very positive

54.4%, Somewhat

positive

10.8%, Somewhat negative

0.4%, Very Negative

15.4%, Not at all

Impact of Index Funds on an Individual’s Investments

Respondents were provided the following statement and then asked the question: Passively managed index funds

are funds that track a group or bucket of stocks and/or bonds. For example, index funds designed to track the

Standard and Poor’s 500 mirror the risk and return of the entire stock market at a very low cost.

Wide Agreement on Views of Index Funds Benefits

24

Q15. When it comes to index funds, how much do you agree or disagree with each of the following statements?


Agree Neutral Disagree Agree Neutral Disagree

Index funds are for amateur investors who lack the

expertise to beat the market. 40.2% 41.6% 18.2% 32.4% 32.1% 35.6%

Index funds are more transparent about their investing

strategy and costs. 46.6% 47.0% 6.4% 57.9% 37.1% 5.0%

Index funds could distort prices and exacerbate

market turbulence.30.0% 52.8% 17.2% 25.6% 42.5% 32.0%

Index funds get better returns than actively managed

funds over the long term. 38.4% 52.8% 8.8% 48.5% 44.3% 7.2%

Index funds that represent the entire market eliminate

risks associated with individual companies, market

sectors and stock picking. 51.8% 38.8% 9.4% 64.5% 26.7% 8.8%

Index funds that represent the entire market have

lower costs and less risk than actively managed funds

that pick certain stocks.52.8% 41.8% 5.4% 66.4% 29.5% 4.0%

Describing Jack Bogle’s Legacy

25

How the General Public Remembers Jack Bogle: In Their Own Words

26

He's the only good investment guy

He never pretended to know how the market would perform unlike most talking heads on tv

Worked for the average investor - not greedy

Has done great things for the average investor

Great man with great vision and financial wisdom

..Because my investments have done remarkably well with Vanguard

Solid investor looking out for the investor

Q21. What is that? (Open-end) [FOLLOW-UP TO Q20. Is your view of Jack Bogle…?]

How Vanguard Investors Remember Jack Bogle: In Their Own Words

27

Stellar reputation and a pioneer in Index Funds

He has made Vanguard a very reputable company who puts it's customers first, long history of transparency, offers a multitude of investment opportunities

He is a pioneer for the average investor to get into the market

I think Jack Bogle has had a clear vision for Vanguard and has created a company that is innovative, stable, and has an excellent reputation within the investment industry

The man seemed to pioneer the industry, while his friends and foes pocketed billions, he put billions into others hands at the cost of his own wealth

He is the pioneer of Indexing and has made Vanguard the great and best investment company it is today

Founder of vanguard. Smart. Trustworthy. Visionary

Q21. What is that? (Open-end) [FOLLOW-UP TO Q20. Is your view of Jack Bogle…?]

Phrases that Describe Jack Bogle’s Legacy: General Investing Public(Respondents Allowed Three Choices)

28

15.0%

16.4%

26.2%

27.2%

32.4%

45.4%

59.8%

0% 20% 40% 60%

Democratized investing.

Vanguard clients also own the company.

Forget finding the needle; buy the entire haystack.

The best friend a small investor ever had.

Vanguard’s priority is to put investors first.

Made investing understandable.

Investing in the entire market with low cost index funds isbetter than stock picking.

Describing Jack Bogle’s Contributions

% Agree

Phrases that Describe Jack Bogle’s Legacy: Vanguard Investors(Respondents Allowed Three Choices)

29

15.8%

22.0%

28.5%

30.9%

43.3%

51.5%

66.5%

0% 20% 40% 60%

Democratized investing.

Vanguard clients also own the company.

Forget finding the needle; buy the entire haystack.

The best friend a small investor ever had.

Made investing understandable.

Vanguard’s priority is to put investors first.

Investing in the entire market with low cost indexfunds is better than stock picking.

Describing Jack Bogle’s Contributions

% Agree

General Public

59.8%

32.4%

45.4%

27.2%

26.2%

16.4%

15.0%

Investors Speak Their Mind on


January 3, 2020

30

investors speak their mind on jack bogle’s legacy · the investing public values jack bogle’s...

Documents