In this compelling episode we welcome Eric Balchunas, Senior ETF Analyst at Bloomberg Intelligence and author of the bestselling book “The Bogle Effect: How John Bogle and Vanguard Turned Wall Street Inside Out and Saved Investors Trillions”. Eric is one of the most recognized voices in the world of exchange-traded funds, combining deep financial expertise with an exceptional ability to communicate complex concepts in an accessible way.
During our conversation, we explore the revolution that Jack Bogle sparked on Wall Street—a story about how one man created the first index fund and built one of the most important financial institutions of recent decades, Vanguard. Eric shares fascinating behind-the-scenes details from writing his book, including insights from three interviews he conducted with Bogle before his passing. As it turns out, Bogle didn’t even know about the Efficient Market Hypothesis when he created the first index fund—his idea was born out of necessity and a serendipitous encounter with an article by Paul Samuelson.
We also discuss the unique ownership structure of Vanguard – a mutual corporation that is the only organization in the world allowing investors to be owners of the firm managing their assets. This distinctive structure enabled systematic fee reductions over decades – from 60 basis points down to nearly zero costs today – and became a “delayed-action bomb” within the financial industry itself.
Eric explains the complicated relationship between Bogle and ETFs. Although Bogle himself was skeptical of exchange-traded funds—fearing they would encourage excessive trading among investors—today Vanguard’s ETFs, such as VTIand VOO, have become the world’s largest funds and have effectively democratized the philosophy of cheap, passive investing on a scale that Bogle himself could never have imagined.
We also discuss the future of active management, emerging categories of ETF products—ranging from “hot sauce” (thematic and speculative ETFs) to “boomer candy” (buffered funds designed to protect investors from losses)—as well as the revolution brought by spot Bitcoin ETFs. Eric calls the SEC’s approval of these funds in January 2024 the “moon landing moment” for crypto, which kicked off an era of “suit coiners”—the institutional adoption of Bitcoin by the traditional finance world.
Finally, Eric reveals details about his upcoming book, “Both Sides of the Coin” which aims to show how Bitcoin ETFs have transformed the investment landscape and why investors should take a fresh look at cryptocurrencies—even if they were skeptical about them before.

Agenda

• Introduction – Who is Eric Balchunas and how he became an ETF analyst at Bloomberg
• The Genesis of “The Bogle Effect” – Why Eric decided to write about Jack Bogle
• Bogle’s Underestimated Impact – Why he was the father not only of passive investing, but also of low costs
• The Critical Role of Funds – How funds stand between investors and the value created by companies
• Was Indexing Inevitable? Why the world would look different without Bogle
• The Genius of Vanguard’s Ownership Structure – How mutual ownership transformed the industry
• Bogle and the Efficient Market Hypothesis – How he arrived at the idea of an index fund
• The Cost Matters Hypothesis – A simple message that reached millions of Americans
• Bogle and ETFs – A Complicated Relationship with the Product That Most Effectively Spread His Philosophy
• Passive vs. Active – Is Passive Investing Really Passive?
• The End of Active Management? How the industry is evolving in the era of cheap index funds
• Hot Sauce and Boomer Candy – New Categories of ETF Products for Different Generations of Investors
• Bitcoin ETFs as a Moon Landing Moment – Why the Approval of Spot Bitcoin ETFs Was a Breakthrough
• What Would Bogle Have Thought About Bitcoin? A Hypothetical Fourth Conversation with a Legend
• Tokenization vs. ETFs – Which Technology Will Win in the Future?
• The New Book “Both Sides of the Coin” – What Eric Wants to Convey to Readers About the Crypto Revolution

Key People Mentioned in This Episode

• Jack Bogle – Founder of Vanguard and creator of the first index fund. The central figure of Eric’s book “The Bogle Effect” Bogle revolutionized investing by introducing the mutual ownership structure and championing low-cost index funds.
• Paul Samuelson – Nobel Prize-winning economist whose article in a finance journal inspired Bogle to create the first index fund. Samuelson called for someone to launch an index fund to provide a benchmark against active managers.
• Nate Most – Creator of the first ETF (SPY). He approached Bogle in the early 1990s asking to create an ETF based on Vanguard’s index fund, but Bogle declined, fearing it would encourage excessive trading.
• Warren Buffett – Legendary investor and Berkshire Hathaway CEO. One of over 50 people Eric interviewed for “The Bogle Effect.” Like Bogle, Buffett shares skepticism toward assets without cash flows and intrinsic value.
• Larry Fink – CEO of BlackRock. His company’s filing for a spot Bitcoin ETF in 2023 marked a turning point for crypto legitimacy. BlackRock’s involvement brought institutional credibility to Bitcoin investing.
• Michael Saylor – CEO of MicroStrategy, mentioned as an example of how the S&P 500 index committee has discretion to exclude companies that meet technical requirements.
• Zohran Mamdani – NYC Democratic mayoral candidate and socialist politician. Eric mentions him in the context of how currency debasement and housing affordability issues—similar to Bitcoin’s appeal—influence election outcomes.

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