This week, we talk to Eric Balchunas, a senior ETF analyst at Bloomberg, who has more than a decade of experience working with ETF data, designing new functions and writing ETF research for Bloomberg Terminal. talk Also contributes articles, feature stories and blog posts on ETFs for Bloomberg.com and appears weekly on Bloomberg TV and Bloomberg Radio to discuss ETFs. His latest book “The Bogle Effect: How John Bogle and Vanguard Turned Wall Street Inside Out and Saved Investors Trillions“
He explains what the Vanguard Effect is — notably, the cost-conscious approach that Jack Bogle pioneered has had a huge impact on the wealth management business. Vanguard Group has consistently lowered costs for investors, forcing the rest of the wealth management industry. We discuss Vanguard’s privacy over indexing, rather than the ultra-low cost of VG. If passives had never been invented and Vanguard Group only made actives at lower costs, it would still be a behemoth.
For more than four decades, Vanguard avoided all the scandals and negativity that tarnished the rest of Wall Street. He explains how this leads to a higher level of confidence and comfort for mom and pop investors. Once they come to Vanguard, they never leave. Even during recessions like the Great Financial Crisis in 2008-09 and the pandemic in 2020, VG has received substantial client inflows.
Balchunas marvels at Bogle’s 40-year campaign to drive low-cost cars. For the first half of Vanguard’s history, it was an uphill climb. Convincing investors and the rest of the industry was a slow process. Eventually, academia and Main Street realized Vanguard’s value proposition, leading them to rise to their $8 trillion dollar size today.
Here is a list of his favorite books; A transcript of our conversation is available here later this week.
You can stream and download our entire conversation with podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All our previous podcasts on your favorite podcast host can be found here.
Be sure to check out our Masters in Business next week with NYSE President Lynn Martin, part of Intercontinental Exchange. The NYSE is the world’s largest stock exchange, with 2,400 listed companies and a combined market cap of ~$36 trillion. He began his career in Global Services at IBM.