Berkshire Meeting: Bogle Says There is Such a Thing as Too Much Indexing

Features Dow Jones Newswires

While Warren and Charlie take a break, the Yahoo team that's webcasting the proceedings decided to interview their hero: Jack Bogle.

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Mr. Bogle, the founder of indexing pioneer Vanguard Group, said there is in fact a point at which indexing can cause a problem. He said that if everybody indexed, the only word you could use would be chaos and the markets would fail.

But what are the changes of that happening? "Zero," said Mr. Bogle in the interview with Yahoo.

Mr. Bogle noted that if indexing is 23% or 24% of the stock market today, it could probably get to 50% without any problems to trading.

One place he's more concerned is liquidity, specifically in the bond market.

"I do have a concern about liquidity in the municipal bond fund market," said Mr. Bogle.

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He also noted big issues with exchange-traded funds, saying there are too many, they're too speculative and they trade too often.

Click here to see the full live coverage of Warren Buffett at Berkshire Hathaway's annual meeting:

http://www.wsj.com/livecoverage/berkshire-hathaway-2017-annual-meeting-analysis

Write to Geoffrey Rogow at geoffrey.rogow@wsj.com

(END) Dow Jones Newswires

May 06, 2017 14:39 ET (18:39 GMT)