RT Journal Article SR Electronic T1 “Big Money in Boston”: The Commercialization
of the Mutual Fund Industry JF The Journal of Portfolio Management FD Institutional Investor Journals SP 133 OP 146 DO 10.3905/jpm.2013.40.1.133 VO 40 IS 1 A1 John C. Bogle YR 2013 UL https://pm-research.com/content/40/1/133.abstract AB Over the course of his six-decade-plus career, Vanguard founder John C. Bogle has witnessed—and been an active participant in—sweeping changes in the mutual fund industry. In the early days, “Boston Trustees” usually managed a single fund, with a focus on the long-term, prudent investment, and stewardship. Today the industry is dominated by giant financial conglomerates running fund supermarkets, focused on short-term, more aggressive strategies, and salesmanship. Four major changes drove this change in the mutual fund culture: 1) The industry’s incredible growth. 2) Aggressive, high-risk investment strategies. 3) Product proliferation. And 4) conglomeratization. Yet one innovation stood firm against that rising tide—the index fund. In recent years, investor cash inflows have poured into “passively-managed” index funds while “activelymanaged” equity funds have endured substantial outflows.TOPICS: Portfolio management/multi-asset allocation, passive strategies, mutual fund performance