Vanguard mourns passing of Windsor Fund legend John Neff

June 6, 2019

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John Neff photo

John Neff

John B. Neff, the mind, face, and psyche behind Vanguard Windsor Fund's exceptional performance for more than 30 years, passed away on Tuesday.

Mr. Neff, 87, a managing partner of Wellington Management Company LLC, served as the Windsor Fund's portfolio manager from 1964 through 1995. He also managed Vanguard Gemini and Gemini II funds, among other portfolios. Over the decades, Mr. Neff earned a reputation as one of the industry's sharpest investment minds for his value-oriented, patient, long-term approach.

"Our deepest sympathies are with the Neff family," Vanguard CEO Tim Buckley said. "John always delivered for his clients, defined value investing, and mentored the next generation of Wellington investors, benefiting several Vanguard funds. His legacy lives on in those he mentored."

Under Mr. Neff's direction, the Windsor Fund grew from $75 million in net assets to $13.6 billion in December 1995. The Windsor Fund returned an average of 13.7% annually over Mr. Neff's tenure, compared with 10.6% for the Standard & Poor's 500 Index.

Mr. Neff and Fidelity Investment's Peter Lynch were the undisputed portfolio manager stars of the mutual fund industry in the 1980s and 1990s, an era when the media and investors paid close attention to the most successful stock pickers and active management was the dominant strategy for investors to gain exposure to the equity markets.

Mr. Neff offered insight into his philosophy in Windsor's Report From The Investment Adviser in 1994:

"If we buy enough stocks that go up and avoid for the most part those that go the other way, and the market doesn't do much, we will turn in a good result for shareholders."

Holding high-yield dividend stocks was also part of his strategy, for Windsor and other Vanguard funds, including the Qualified Dividend Fund.

Speaking about the Qualified Dividend Fund, Mr. Neff was quoted in a 1984 New York Times article: "If you have a 10 percent yield in hand, you don't have to shave much off the appreciation side. It's kind of like four yards and a cloud of dust."

Vanguard closed Windsor to new investors in 1985 in response to strong cash inflows that threatened the efficiency of the fund's strategy. At the time, it was the nation's largest equity fund and fund closures were rare in an industry in which gathering assets was the primary aim. Windsor was Vanguard's largest fund until the 1990s, when investors began to more fully embrace indexing.

"It would be impossible to overestimate John's importance to Vanguard's survival in the early years," said Vanguard founder John C. Bogle, who died in January at age 89. "His well-earned reputation enhanced Vanguard's credibility and created acceptance in the investment community as we struggled to establish our own identity.

Having served as managing partner, senior vice president, and member of the executive committee at Wellington Management, Mr. Neff formally retired on December 31, 1995. After stepping down from his roles, he remained an advisor to Wellington. In 1999, Mr. Neff published his book, John Neff on Investing, which showcased his career in portfolio management as well as his investing strategies and techniques.


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