John Bogle

By Eliot Spitzer, attorney general of New York

Fifteen percent of the money in equity mutual funds--nearly $600 billion--is invested in low-cost index funds. Investors have one man to thank for making that option available to them: Jack Bogle, founder of the Vanguard mutual fund group and creator of the first index fund in 1975. Bogle's genius was to recognize that most investors--including the managers of mutual funds--underperform the market. Factor in the transaction and management fees imposed by traditional mutual funds, and investors fall even further behind the market. Bogle's simple idea was to create a fund that would track the market. There was no longer any need for high-priced stock pickers or heavy portfolio turnover.

In light of the past years' revelations about mutual-fund abuses, Bogle seems remarkably prescient. He likes to say that his greatest accomplishment was "putting the mutual back in mutual funds." As he wrote in his senior thesis at Princeton, a financial enterprise must serve investors "in the most efficient, honest and economical way possible." In his 50-year career he has never wavered from those principles. Bogle's success in making Vanguard an industry giant demonstrates that it is possible to do right by the customer and still do well. --By Eliot Spitzer, attorney general of New York