To This Fan Club, Vanguard Founder John Bogle Is a Star; The Bogleheads gather online and in person to celebrate index investing and their idol

Updated October 6, 2013, 4:51 p.m. ET

To This Fan Club, Vanguard Founder John Bogle Is a Star

The Bogleheads gather online and in person to celebrate index investing and their idol

ANNA PRIOR

Fan clubs exist to enable enthusiasts to bond over everything from Porsches to poodles. But a fan club for mutual funds? “I remember being excited and telling my wife, ‘There is a group of people that hang out on the Internet that are low-cost investors just like we are,’ ” says Ed Rager, a retiree from Annandale, Va. Mr. Rager and his wife, Patti, are members of the Bogleheads, also known as the Vanguard Diehards—an online and increasingly offline community whose members tend to favor long-term, low-cost index investing inspired by Vanguard Group Inc. founder John Bogle.A rarity in the mutual-fund world (“I’m not aware of a similar group dedicated to following an investment company,” says Christine Benz, director of personal finance at investment researcher Morningstar Inc.), the Bogleheads group has grown substantially from its roots in the late 1990s as a forum on Morningstar’s website where the Vanguard Diehards could gather and exchange thoughts.

The Bogleheads empire now includes a website of 37,000 registered members (bogleheads.org) with forums sporting nearly two million posts, an online wiki detailing the group’s history and the investment advice found on its forums, local chapters that hold regular meetings, two books, and a yearly “reunion,” where members listen to speakers, swap advice and meet their idol, Mr. Bogle.

“It was like meeting a movie star,” says Paul Globerson, a San Diego Boglehead, of his first encounter with Mr. Bogle, at the group’s third reunion in Chicago in 2002.

The Rock Star

The latest reunion—2013 Bogleheads Conference—is slated for later this month at a Philadelphia-area hotel, where expected speakers and panelists include financial advisers, authors, professors and experts like Ms. Benz, former Vanguard Chief Investment Officer Gus Sauter, and of course, Mr. Bogle.

The adulation “is so over the top that I basically have to let the swelling out of my head as soon as I leave the room,” jokes Mr. Bogle, 84 years old.

Like several reunions in recent years, this year’s event is expected to include a trip to Vanguard headquarters in Malvern, Pa., where the Bogleheads, most of whom are Vanguard investors, can interact with fund managers and executives. “We do 80% plus of our interactions with our investors over the Internet, so this really is a powerful event,” says Vanguard spokesman John Woerth.

To understand the origins of the Bogleheads, we need to rewind back to 1998 when two pro-indexing do-it-yourself investors and retirees—de facto Boglehead leaders Mel Lindauer and Taylor Larimore—began corresponding via email and posting on Morningstar’s Vanguard Diehards forum.

“We were saying the same thing over and over again to new investors posting on the board, so Taylor and I decided to do a post together called ‘Your First Step,’ ” says Mr. Lindauer, age 75. Eventually, the posts caught the attention of Mr. Bogle, who reached out to the Bogleheads through Mr. Larimore about having a meeting.

“To us, this is like getting an invitation to the White House,” says Mr. Lindauer.

Fans and Critics

So in 2000, the first Bogleheads reunion took place with Mr. Bogle and about 20 investors in Mr. Larimore’s Miami condo (“the house that Jack built,” as Mr. Larimore is fond of saying).

Thirteen years later, about 200 people are expected to convene at the reunion in Pennsylvania. (They limit the number to keep the event intimate.)

Most of the Bogleheads are ardent fans of Vanguard’s low-cost funds. But it is also personal: “We’re disciples of Jack Bogle,” says Michael LeBoeuf, a Boglehead and retired professor of management at the University of New Orleans who co-authored “The Bogleheads Guide to Investing.” He has “done more to contribute to the financial well-being of the small investor than anyone I can remember,” Mr. LeBoeuf says.

It is this single-minded devotion to Mr. Bogle, combined with the group’s complete independence, that can at times lead to friction between the Bogleheads and the investment firm.

Though both sides decline to discuss the matter, it shouldn’t be hard to determine whose side the Bogleheads took in 1999 when Mr. Bogle was asked to leave Vanguard’s board at the mandatory retirement age of 70. (Mr. Bogle ended up moving to a then-new research institute on Vanguard’s campus, which continues to be his base today.)

“That has been something Vanguard has likely wrestled with—on the one hand they have these great supporters and believers, but on the other hand, the Bogleheads aren’t within Vanguard’s control,” says Morningstar’s Ms. Benz.

Relations between Vanguard and the Bogleheads are warm now, with Vanguard acknowledging the power of having such a loyal following. Says Mr. Woerth: “They are our biggest fans and our harshest critics.”

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: