The individuals named in a survey by a consulting organization as the 20th century's greatest money managers certainly earned their recognition.
In many cases, they deserve credit for breaking new trails in the frontiers of investing, pointing the way for other investors who safely followed in their wake: John Templeton in international investing, Warren Buffett in value stocks, Gary P. Brinson in multiasset allocation, among others.
These managers, for sure, have had not only success but also longevity. They aren't the one-year or one-market-cycle hotshots, whose performances are ephemeral and fleeting.
But at the top of that list of honorees should be John Bogle - who was named among the best - and all of the other pioneers of U.S. equity indexing. They would include academics like Eugene F. Fama, professor of finance at the Graduate School of Business of the University of Chicago, and practitioners like Rex A. Sinquefield, chairman and chief investment officer, Dimensional Fund Advisors Inc., Santa Monica, Calif. They have made a lasting contribution by creating the indexing investment structure that will endure beyond any person so honored.
With active managers, how long their impact lasts depends on how well their acolytes learn their lessons and can adapt them to new and often far different circumstances they will encounter in dynamic markets. It won't be easy for them to repeat the success of their mentors.
Indexing, though, endures beyond the work of any one individual, however amazing the record of any of the active managers on the list.
It provides a relatively simple investment structure that is easy to follow. Plus it provides a low-cost, low-transaction way for all investors - whether institutions with huge pools of assets or small-time individual investors - to capture competitive returns in the market.
Importantly, indexing management institutionalizes investment management. It is not dependent on finding the "right" person - that is, the next Warren Buffett - to manage assets.
Indexing has allowed many more people to gain competitive market returns than the investment management talents of all of the active managers listed among the best. Even though they might have achieved superior returns, their clientele, while big, was still more limited than that of the indexers.
Indexing may not continue to do as well relative to active managers as it has in the past two decades. But all managers can't beat the market, because collectively they are the market.
The time, energy and money investors must spend on searching for active managers - not to mention the stress they must bear in making decisions to select such managers - make indexing a highly compelling investment.
Indexing sets a high standard for consistency. So the active managers named to the list of the best managers of the next century, whomever they are, surely will have deserved their honors.