Today, Vanguard celebrates 30 years of indexing with the original introduction of the First Index Investment Trust — now known as Vanguard 500 index fund — on August 31, 1976. It was the first index fund available to individual investors in the United States.
“The introduction of the First Index Investment Trust was one of the few truly seminal dates in the mutual fund industry,” said John J. Brennan, Vanguard chairman and CEO. “It offered the individual investor a broadly diversified, low-cost investment approach that wasn’t available before.”
The reaction to this momentous event from Wall Street was “a frown and a shrug”. Conventional wisdom said that only actively managed funds made sense for individuals. Why would anyone not try to beat the market?
Of course, now we know that history was re-written with the introduction of this fund. The Vanguard 500 index fund has also grown to become one of the largest funds in the world.
Below are some statistical snapshots of index funds:
I started investing with Vanguard in August 2001. So, this month also marks my 5 year anniversary of investing with index funds.
Note: The article “Indexing turns 30, and the revolution continues” appears on the Vanguard website HERE.