TO: Veterans and Principals
FROM: John C. Bogle
DATE: March 16, 2015
RE: Financial Times Op-Ed
I penned a commentary for today’s Financial Times “Fund Management” section about the role of exchange-traded funds in the growth of indexing. I describe my concerns with the rapid trading so common with ETFs. The first and largest ETF—the $190 billion SPDR S&P 500 ETF—is the most widely traded equity in the world, averaging over $20 billion in turnover every day. As I wrote in the article, “broad-market exchange traded funds are fine, as long as investors don’t trade them.”
The front page of the FTfm section picked up that commentary in an article by journalist Chris Newlands. The headline of the article is rather over-the-top—“John Bogle renews attack on exchange traded funds”—but the facts presented by Mr. Newlands are accurate.
I like to think that Vanguard is a firm in which constructive debate is tolerated, perhaps even encouraged. My piece in today’s FTfm is a prime example of a case where, as Bill McNabb recently said, “reasonable people can disagree.”
Best,
Jack