Part 3/9:
Bogle describes this transition as an example of disruptive technology—the introduction of index funds challenged conventional wisdom in finance. Despite facing heavy criticism, Bogle remained steadfast in his philosophy: “Gross return in the financial markets minus cost equals net return.” This principle emphasizes the importance of minimizing costs to maximize returns, a core tenet of Vanguard’s approach.
Today, Bogle points out a profound change: actively managed funds witnessed an outflow of approximately $400 billion, while index funds attracted roughly $600 billion within a five-year period. This paradigm shift indicates a growing acceptance of passive investment strategies.