The Pennsylvania Convention Center was recently filled with people from across the globe eager to hear Vanguard founder John Bogle talk at the CFA Institute’s annual conference, writes Erin Arvedlund for the Philadelphia Inquirer.

During his speech, Bogle predicted that based on the existing price-to-earnings compression in the stock market, 10-year equity returns could fall to four percent annually.

He suggested that this could be a potential disaster for long-term liabilities pension funds that rely on higher returns, and it underlines why low fees are important.

Bogle noted that over the last 10 years, equity index mutual funds have seen capital inflows of $1.8 trillion, while their actively managed counterparts have seen capital outflows of $800 billion.

He also expressed concern over the fact that “index-fund management is heavily concentrated among three giant, trillion-dollar money managers that together hold some 20 percent of U.S. stocks.”

“The impact of all this concentration remains to be seen,” he said, speculating that it might invite scrutiny from regulators.

Read more about John Bogle’s talk in the Philadelphia Inquirer here, and check out previous VISTA Today coverage of Vanguard here.

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