He argues that Bogle didn't like the perceived motivation for ETFs, namely, increased trading. Rekenthaler believes that Bogle was not worried as much about retail investors using ETFs poorly as much as he was concerned that ETFs would line the pockets of the exchanges at the expense of investors. He further argues that Bogle's concern didn't materialize, but Bogle simply refused to change his stance toward ETFs. Rekenthaler further argues that ETFs have actually come closer to Bogle's original vision of changing the mutual fund industry than could be achieved with mutual funds.Vanguard founder Jack Bogle rarely erred. He was spot-on when popularizing indexing; bringing institutional pricing to retail investments; avoiding trendy fund launches; and recognizing that positive press would eventually benefit Vanguard more than hiring an expensive salesforce. He was even correct when arguing that U.S. investors didn’t need to own overseas equities. (Perhaps he was merely lucky there, given that American stocks have performed so well, but right is right.)
However, one of his strongly held beliefs--that exchange-traded funds were poor investments--has failed the test of time. Per Jeff Cox of CNBC, Bogle once called ETF investors "fruitcakes, nut cases, and the lunatic fringe."
I know this topic has been beaten to death already, but I thought that this was an interesting article anyway.