John Bogle and Vanguard: Fired at Wellington, an $11 Million Index Flop

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John C. Bogle's 1951 Princeton thesis found that mutual fund managers rarely beat market indexes over time and that fees ate any edge. He joined Wellington Management that year, became president in 1967 and CEO in 1970, but a 1966 merger with a Boston fund group went badly and he was fired in 1974, later calling his conduct inexcusable. He negotiated a separate administrative unit named Vanguard after Horatio Nelson's flagship at the Battle of the Nile, barred from managing money. Following Paul Samuelson's call for an S&P 500 fund, he launched the First Index Investment Trust in 1976. Underwriters hoped for $150 million and raised $11 million.

Brokers ignored a fund that paid no commissions, and after a year it held $17 million until Bogle merged in a struggling Wellington fund to near $100 million. The 1982 bull market proved the low-cost model, and Vanguard was structured so its funds own the management company, which runs at cost. It added the first bond index fund for individuals in 1986. Bogle stepped down as chairman at 70 in 1999 and criticized the firm's push into ETFs, which invite frequent trading. By 2025 Vanguard managed $13.3 trillion, bought Altruist for $4 billion, and opened its platform to crypto ETFs after blocking Bitcoin ETFs in early 2024.

• Bogle won the Vanguard name by noting it would sit next to Wellington in newspaper fund tables.
• Rival index funds carrying standard high fees left Vanguard dominant in low-cost investing.
• Successors included Jack Brennan, Bill McNabb, Tim Buckley and Salim Ramji.
• In 2021 Vanguard joined a net zero pledge while holding $86 billion in coal, the largest coal investor worldwide.
• A 2025 UN report on Gaza named Vanguard as a major investor in firms including Lockheed Martin, Elbit Systems and Palantir.