Vanguard Group founder John Bogle, the icon of index-based investing, is proud of the revolution he helped launch when he created the first index-based mutual fund more than 40 years ago. In fact, the theme of the “index revolution” was a prevalent throughout the presentation he gave on Tuesday at the CFA Institute’s annual conference in Philadelphia.
Speaking in a clear, strong voice that belies his 88 years, Bogle emphasized his belief that buy-and-hold indexing is here to stay. But Bogle, whose indexing tastes run towards vanilla market cap-weighted strategies, isn’t a fan of some of the jazzier flavors of indexing that stray from that orthodoxy.
“The index revolution is not without its flaws,” he said, taking aim at smart beta indexing strategies that replace market cap-weighted portfolios with methodologies using fundamental factors such as value, low-volatility and momentum.