2026-08-18
7 分钟The launch of the Vanguard First Index Investment Trust 50 years ago this month could have gone better.
Jack Bogle, Vanguard's founder, called it an abject failure.
He had hoped to raise somewhere between $50 million and $150 million, but got only a little over $11 million.
That's $65 million today.
As the first fund aiming to do no more than track a stock market index, America's S&P 500,
that was available to individual investors, it nevertheless raised hackles.
One conclusion, usually expressed with considerable feeling, is that index funds are a cop-out
and a fad that will soon disappear,
sniffed an article in the Financial Analyst's Journal, published later the same year.
Half a century on, there is no sign of that.
Over 50% of net assets overseen by American investment funds are in trackers,
estimates the Investment Company Institute, an industry group.
For funds focused on domestic stocks, the share is 64%.
Whether through your own savings, a corporate pension scheme,
or a university endowment, you probably have a stake in at least one.
Predictably, the professional stock pickers, whose lunch has been eaten, are as furious as ever.
Worse than Marxism, thundered Bernstein a broker in 2016. Last month, Terry Smith,
a favourite fund manager of British retail savers, spent much of his half-yearly investor letter
blaming his long underperformance on a market which is dominated by so-called passive or index funds.
Full disclosure, your columnist, who used to own units in one of Mr Smith's funds,