https://personal.vanguard.com/us/insigh ... =Position1Not only did Vanguard founder John C. Bogle launch the first index mutual fund in 1976, but he also was among the first to clearly explain to the investing public the benefits of what was then a novel, unproven strategy.
In 1977, in the first annual report for what was later renamed Vanguard 500 Index Fund, he wrote that an index fund "represents a tough and demanding 'par.' . . . And if there are some professionals who can 'beat par' more often than not—in investing or in golf—they do not seem to be in the majority'...
The data speak for themselves
The track record looks even more discouraging for active funds when you consider that of the 35% of them that outperformed the index, only 119—or about 10% in all—did so by more than 1 percentage point. The 315 others also took on risk to try to outperform the index (and likely experienced greater volatility) but surpassed it by less than 1 percentage point in average annual return.
Indexing may have been a hard sell 40 years ago, but it has won over many investors in the decades since. Its share of U.S.-based exchange-traded fund and mutual fund assets stands at a little more than one-third, representing about $3.5 trillion.