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An Unlikely Effect Of Jack Bogle’s Creation: Helping to Keep Inflation Low

TedTed
edited February 2019 in Fund Discussions
FYI: A month after Jack Bogle’s death, evidence of the good things he wrought continues to arrive, sometimes from unexpected places.

Jack created Vanguard as a penny-pinching institution owned by its funds’ shareholders. He popularized low-cost index funds and, in the process, radically reduced the expenses incurred by millions of rank-and-file investors.

Now, it turns out, cost savings from various types of index funds, run by Vanguard, BlackRock, Fidelity, Schwab, State Street and others, are having a measurable impact on inflation much as prices for groceries and gasoline do.

In January alone, the Bureau of Labor Statistics found, overall portfolio management costs in the United States “plunged 5.2 percent,” Michael Feroli, the chief United States economist at J. P. Morgan, said in a note on Feb. 14.
Regards,
Ted
https://www.nytimes.com/2019/02/22/business/jack-bogle-index-funds-inflation.html?rref=collection/timestopic/Mutual Funds&action=click&contentCollection=timestopics&region=stream&module=stream_unit&version=latest&contentPlacement=1&pgtype=collection

Comments

  • InvestorInvestor
    Yes, even if one does not buy his index fund philosophy, he/she is benefiting from overall lower costs. We are indeed lucky in the US. European versions of popular funds (or similar funds) have eye popping costs and fees. Thank you John Bogle!
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