RIP: Jack Bogle—The Father of Passive Investing

The father of passive investing, John Clifton Bogle, better known as Jack Bogle, passed away on January 16, 2019, at the age of 89. There are very few individuals who have made such an indelible mark on the entire mutual fund industry. He has democratized mutual fund investment in a true sense. His incredible innovation has benefited the investors of all stripes.

He is credited with creation and popularisation of the index fund that closely mirrors a stock index. Long back, he understood what others are realising now—that the secret sauce of investment success in a mutual fund is lower cost, which can be achieved by investing in index fund that has lower cost as compared to actively managed funds. The fact that most of the actively managed funds could not beat the equity indices or their respective benchmarks consistently over a longer period of time makes it even more appealing for the investors. These two facts have led to exponential rise in the assets under management (AUMs) of the index funds.

The AUMs of index funds have increased from USD 11 million in 1975 to around USD 12 trillion currently and form 17.5% of the total MF AUMs. India has also not remained immune to this phenomena and has witnessed a huge increase in AUMs of index funds.

There are smarter ways other than investing in low cost index funds that will enrich you and help you to earn better post-tax returns. One of them is ‘tax harvesting’. Earlier, it was only related to ‘tax loss harvesting’; however, post the Union budget of 2018, you can even use ‘tax gain harvesting’.

Our cover story gives you a detailed analysis of how you can use it wisely to enhance your returns up to one per cent every year. We have extended the same logic even to ELSS, where you can recycle the invested amount after three years of lock-in period to create a perpetual tax saving investment.