Warren Buffett reveals his investment hero is tracker fund pioneer Jack Bogle

27 February 2017
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Warren Buffett, who many consider to be the world’s greatest investor (read more about him in our article Who is Warren Buffett?), has again commented on his love for passive funds over active.

He is previously on record as saying, “that's what most people should do - buy a cheap index fund, and slowly dollar-cost average into it,” (of course, we call this ‘pound cost averaging’ and has now stated in his annual letter for investors that a certain Jack Bogle is his hero.

Who is Jack Bogle?

The 87 year old is the founder of Vanguard, an investment company that specialises in offering low-cost tracker funds, which aim to track the performance of a particular stock market index; such as the FTSE 100 or the FTSE All Share, rather than picking individual stocks. You can read more about this on our First 50 Funds page.

 

Three of Vanguard’s tracker funds make our First 50 Funds list.  They are the LifeStrategy 20% Equity Fund, LifeStrategy 60% Equity Fund and the LifeStrategy 100% Equity Fund. These funds, among others, had their charges cut this January.

“He helped millions of investors realize far better returns on their savings”

One of the big advantages of passive tracker funds versus actively managed funds, which is where you pay somebody to pick stocks for you, either to buy or sell, is the lower fees.

This was addressed in Mr Buffett’s letter, where he writes: “For decades, Jack has urged investors to invest in ultra-low-cost index funds. In his crusade, he amassed only a tiny percentage of the wealth that has typically flowed to managers who have promised their investors large rewards while delivering them nothing - or, as in our bet, less than nothing - of added value.” He then adds: “Today, however, he has the satisfaction of knowing that he helped millions of investors realize far better returns on their savings than they otherwise would have earned. He is a hero to them and to me.”

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