Why Bogle was the best CEO

Want to know how to run an asset management company that truly serves investors? Look to Jack Bogle, says Morningstar columnist John Rekenthaler

John Rekenthaler 29 January, 2019 | 6:00PM

Bogle was the best chief executive officer in fund history, and second place isn’t even close. He began in the right place: attempting to create top-notch products. That advice sound obvious, but in the '70s it was not. Many leading mutual fund companies offered mediocre funds.

The general belief was that “funds are sold, not bought,” and that what mattered for business success was distribution power and brand recognition. Strong fund returns were useful but not strictly necessary.

This condition persisted through the '90s but has since expired. The Internet applied the final blow. Mutual funds, and their offshoots, exchange-traded funds, were already the most closely measured of consumer purchases. Marketers could talk vaguely about their automobiles’ superiority or their diet pills’ benefits, and prospective buyers would have difficulty distinguishing between fact and fiction. Not so with funds. Their attributes could be scored and--during the Internet age--easily obtained.

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John Rekenthaler

John Rekenthaler  John Rekenthaler is Vice President of Research for Morningstar.

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