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Legends in Our Own Time

Americans did not wake up at the beginning of the 1990s and decide to run with the bulls. A combination of collectively innovative minds brought the power of mutual fund investing to the American public.

In celebrating the publication's 10th anniversary in this special year-end issue, the editors of Mutual Fund Market News have selected 10 individuals who have made the greatest contributions to the mutual fund industry over the past 10 years.

Each of the following 10 gentlemen has distinguished themselves, their affiliated firms and the industry over the course of their careers - and in so doing, have benefited the investor. Whether they helped create a new investment vehicle, a grand stage on which it can be played, or simply the tools by which mutual funds can be measured, each of the following 10 has made tremendous contributions.

Thomson Media's Mutual Fund Market News salutes the following executives for their unconventional thinking as well as their grasp of competitive subtleties that have set both their firms, and themselves, apart.


(In alphabetical order. Selected by the editors of Mutual Fund Market News.)

Ted Benna

John C. Bogle

Robert L. Goldberg

Bill Gross

A. Michael Lipper

Peter Lynch

Don Phillips

Paul F. Roye

William F. Sharpe

Charles R. Schwab

Ted Benna

Father of the 401(k)

When studying a company's retirement plan back in the 1970s, Ted Benna discovered what would otherwise just have been another impenetrable IRS clause: the 401(k). By applying his own ideas about an employer-matching contribution and employee pre-tax payroll deductions, Benna came up with a retirement savings vehicle that, as all of the "Legends" here readily admit (including Benna himself), has been one of the key drivers of the mutual fund industry's great success.

Benna, president and founder of the 401(k) Association, was awarded the National Jefferson Award at the Supreme Court in 2001 for "greatest public service by a private citizen." Benna says making the 401(k) come alive was "responsible for making Fidelity, Vanguard and Janus household names.

"The impact goes far beyond the money that has gone into 401(k)s" to IRAs, 529s and the entire philosophy of saving for one's future, Benna says.

The industry is at a critical juncture, Benna continues:

"My biggest hope is that the fund industry will help to restore investor confidence so that workers will continue to save for their retirement.

"We are all dependent upon a strong economy and healthy stock market for our future economic well-being. Another year or two of negative returns is likely to have a lasting adverse impact, putting the retirement of many workers at risk."

John C. Bogle

"My life has been built on trying to do the best I can, every day."

Fifty-one years ago, John C. Bogle's Princeton senior thesis became the genesis for the first index mutual fund. In fact, Bogle did more to advance the mutual fund industry by founding Vanguard in 1975, 51 years after the fund industry's very beginnings in 1924, than anyone before his time, and he has continued to make vast contributions to the industry in the 51 years since that original senior thesis.

Today, the former chairman of Vanguard's longtime call for better shareholder servicing has never seemed more timely or cutting edge.

Here's what Bogle has to say about the greatest developments of the past 10 years, his role in that, how he'd like to see the industry changed, and what the "lightbulb" was that went off in his mind to lead him to all of this:

"The great bull market made Americans believe that mutual funds were a way to substantially build their retirement funds particularly rapidly. Compared to the $278 billion in equity fund cash inflows in 2000, the $40 billion in outflows this year is only a tiny bit. We have the great bull market to thank for that.

"I hope this industry will change from merely making money for themselves to making money for their clients, trustees and fiduciaries, and to embracing the current regulatory campaign for more transparency.

"But the only thing that will cause this industry to truly serve its principals, the investors, is the awareness of investors, not the SEC, not Wall Street, and certainly not the fund industry.

"It is certain to happen, but I fear it will take a long time.

"My three greatest achievements have been creating the index fund, remaking Wellington and creating Vanguard, and trying to make sure the investor gets a fair shake."

Don Phillips

Analyze This

Besides being one of the first people to join Morningstar, in 1986, which, through its star rating system has arguably created the most understandable tool for gauging funds, Don Phillips, managing director, also is the architect of Morningstar's ubiquitous style box.