Bogle Not Popular at Vanguard Either
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Friday, May 09, 2003

Bogle Not Popular at Vanguard Either

Those who have seen Vanguard founder Jack Bogle wandering the halls of the Washington Hilton alone at the annual ICI General Membership Meeting are likely aware of the industry's frosty relationship with the popularizer of indexing. A profile in today's Boston Globe argues that Bogle's relationship with the folks at Vanguard is not much warmer.

Bogle and John Brennan, his successor at Vanguard, no longer speak, reports the paper. It adds that Bogle along with an secretary and a research assistant have been exiled to the floor below the executive suites and now take up residence in the Vanguard legal department.

"It is best for them not to see me there," the article quotes Bogle as saying. "I think they feel much more comfortable about it. They don't talk to me. There is no communications. It is fine with me."

Deepening the rift are the different philosophies of Bogle and Brennan. The latter has positioned Vanguard more within the mainstream of the fund industry. He has launched more actively managed funds, including a tech fund that Bogle is critical of, and even steered the company into hedge funds.

Bogle is also critical of the increased marketing budget at Vanguard since he left. Tellingly, Bogle appears to be getting his information about the Vanguard marketing budget from the newspaper and not from Vanguard officials directly.

"I have read press reports that put our advertising expenditures at $25 million to $30 million," he told the paper. "That seems like a lot of shareholder money to be spending on advertising."

Still, the frosty environment is not holding Bogle back from his work. He says he continues to work 60 hours per week. His schedule includes a weekly segment on CNBC and three speeches a week.

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