The world's biggest mutual fund company, the mutual fund industry as a whole, and the industry's most famous insider-critic all celebrated
a big milestone yesterday: 40 years of indexed mutual funds.
| Jack Bogle|
The Vanguard Group
Founder and Retired Chief Executive Officer
On August 31, 1976, Jack Bogle's Vanguard
] launched the First Index Investment Trust (since rebranded as the Vanguard 500 Index Fund
). Four decades later, the fund once mocked as "Bogle's Folly" now holds $252 billion; that's 22,300 times its launch AUM of $11.3 million in 1976. And indexed mutual funds and ETFs now hold nearly $5 trillion in combined AUM.
Vanguard put out a statement
, "Let the low-cost, passive party begin." And Bloomberg
and the Wall Street Journal
both offer fundsters a walk down index fund memory lane and even beyond. They highlight indexing's early critics, as well as the advocacy and influence of analyst Ben Graham
, economist Paul Samuelson
and others on the creation of index funds.
"He became in many respects my mentor," Bogle, talking to the WSJ
, says of Samuelson. "I would put the phone on speaker so I could write down his ideas as he rattled them off."
Oh, and though index funds have boomed in the last two decades, Vanguard's indexing Rome wasn't built in a day. Bogle reminds Bloomberg
that the first fund started out as "a complete flop."
Neil Anderson, Managing Editor
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