On August 31, 2026, Vanguard's First Index Investment Trust, which tracks the S&P 500 index and is better known as Vanguard 500 Index Fund (VFINX), commemorates its 50th anniversary. Launched by John C. Bogle, the fund initially aimed to raise between $50 million and $150 million but secured only $11.3 million, leading critics to dub it "Bogle's Folly." Despite this slow start, Bogle was resolute, declaring it "the beginning of something big." The fund didn't even have enough initial capital to buy all 500 stocks in the index, acquiring only 280.
Today, the fund has grown significantly, with all share classes of Vanguard 500 Index holding $1.67 trillion in assets. A $10,000 investment at its inception in 1976 could now be worth nearly $2.0 million, and a $15,000 investment could be worth over $3.6 million. The fund's success underscores the power of low-cost investing and compounding, and Vanguard estimates that indexing has saved investors approximately $570 billion in fees by the end of 2025. This has made indexing the default choice for many Americans saving for retirement, with Vanguard itself managing about $12 trillion globally.
Bogle's vision also led to the elimination of sales loads, making Vanguard one of the first no-load mutual fund companies shortly after the fund's launch. This innovation, along with minimal overhead and trading, resulted in significantly lower expense ratios for index funds compared to actively managed funds. For instance, the annual operating expense for Vanguard 500 Index Fund's largest share classes is now 0.03% for ETF Shares and 0.04% for Admiral Shares, a substantial decrease from its initial 0.43%. The fund has demonstrated resilience, navigating through various market events over five decades, with its Investor Shares (VFINX) achieving an average annual total return of 11.44% since inception by March 31, 2026.
