Unfortunately, Mr. Borg passed away on June 6th, 2065438+2009+65438, and he never listened to Borg's speech again, so now he has a new book about John Berg. After reading it, I placed an order at the first time, and I was pursuing the old man's thoughts between the lines.
The book John Berg and Pioneer Group is not about the investment concept of index funds, but about John Berg's work in Pioneer Group from youth to retirement, which provides a new perspective for everyone to understand the hard-won development of index funds.
From graduates to Wellington CEO
John Borg graduated from Princeton University with 195 1, and published a famous paper during his college years, pointing out that the future development of * * * mutual funds needs to serve investors honestly and efficiently, and reduce advertising expenses and save costs for investors when investing.
After graduation, Borg joined the Wellington Company, the predecessor of Pioneer Group. I didn't expect his career to be dedicated to this company.
Wellington Company was founded by Morgan on 1920. By 195 1, the scale of Wellington Fund management is1900,000 US dollars, making it the fourth largest fund in the United States.
1953, Borg became Morgan's assistant, and worked in this position for 7 years, taking this opportunity to understand all aspects of fund business, as if Morgan also trained Borg as a direct disciple. By 1965, Morgan handed over the position of CEO of Wellington Fund to Borg.
Internal power struggle
The board of directors of the same fund will generally employ a management company to undertake all fund operation functions, including account management, sales, investment management, etc. The management company will charge the fund company a management fee of 1%.
Borg believes that this organizational structure is wrong, because it leads fund management companies to make decisions according to the interests of shareholders, rather than from the perspective of investors.
Borg's attempt to take back the fund management authority touched the interests of the employing company, which also had a wise seat in the foundation, which turned into a contradiction of internal rights struggle. The board of directors finally demanded Borg's resignation with the result of 10: 1.
But Borg refused to resign, insisting that the fund should have its own voice, rather than relying on the partnership company, and finally won the opportunity for himself.
Founding pioneer group
1798, after defeating the French team in the battle of the Nile, General Nelson wrote heroically on the deck of his battleship: proper command, heroic soldiers, strict military discipline, invincible and invincible. The name of that warship is "Pioneer"
The name "pioneer" has aroused the discussion of the Borg people. He imagined himself at the helm of the Pioneer, braving the wind and waves. Finally, he named the new fund "Pioneer Group".
The most important concept of Pioneer Fund is: low operating cost.
Assuming that the initial investment of both investors is $654.38 +00,000, the return on expenses is 654.38+00%, and A's fund rate is 0.3%, which is equivalent to 9.7% after deducting expenses, he will get a total return of $63,700 after 20 years. The fund rate of B is 1.2%, which is equivalent to 8.8% after deducting expenses. After 20 years, his total return is $54,000, a difference of $9,700, which is almost the original investment amount, and this difference is attributed to the difference in fund rates.
Index Fund: The Invention of Genesis
The first index fund was established in June, 1976. Although the index has obvious advantages, the board of directors is not enthusiastic and the industry reaction is even more negative. It can be said that this is the pursuit of mediocrity, and it can be said that Borg promotes the development of index funds.
It took three months to raise120,000 USD at the beginning of the issue. It is difficult to persuade investors to pursue the average market return, because everyone wants to outperform the market.
Borg thinks that only a few investment geniuses (such as Buffett and Peter Lynch) can surpass the market for a long time, and whether investors can find such an investment genius is like a blindfolded gorilla throwing darts. By analogy, the best strategy is to simply match the average return of the market.
During the period from 1984 to 1994 and 10, the returns of the Standard & Poor's 500 index exceeded 78% of those of ordinary equity funds. If sales expenses are included, only 20% of the funds can really outperform the market.
In the 1990s, index funds began to take off. The index fund scale of Pioneer Group broke through 1 billion in 1988 and increased to15.6 billion in 1995. By the end of 20 17, the management scale of Pioneer Group was about 5 trillion US dollars.
From 2009 to 20 18, the net inflow of domestic stock index funds and ETFs was $65,438 +0.6 trillion, and the net outflow of active funds was $65,438 +0.4 trillion.
The scale of index funds in China increased by 509 billion from 2009 to 20 18 and 10, and the scale of active funds increased by 394.5 billion in the same period.
Index funds are quietly becoming the mainstream investment in China, and more and more people will find that index funds are the best choice in the future.