WORLDVIEW: Don’t put your money into an SA-managed global equity fund. Here’s why.

By Alec Hogg

The Clash of the Cultures by John Bogle is one of the best investment books you'll find. Written by the father of index investing, it focuses on how the investment game was hijacked by marketers in search of taglines. They encouraged money managers to switch from long-term investing to short-term speculation. And investors have been the losers.

Bogle writes from a position of some authority, having created the world's first index mutual fund in 1975 called the Vanguard 500 Index Fund. His idea was to counteract "a profession once focused largely on investing (which) became a business focused on marketing." His revolutionary approach was to mathematically replicate the major stock market indices, creating a diversified portfolio of US stocks intended to be held "forever". Central to the concept was cutting expenses by eliminating research teams and advertising campaigns, passing the benefit on to investors through lower costs.

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