The Worst Fund Launch in History Just Turned Fifty

This August marked fifty years since Jack Bogle launched a fund that almost nobody wanted.

He called it the First Index Investment Trust.

He hoped to raise $150 million.

He raised just over $11 million.

Bogle’s own words for it, later: “an abject failure.”

The idea itself sounded almost embarrassingly simple.

Don’t pick stocks. Don’t try to beat the market. Buy hundreds of companies at once, in the exact proportions the index gives you, and get on with your life.

Every other fund manager around him was doing the opposite. Studying companies. Trying to work out which ones would beat the market and which ones wouldn’t.

Bogle’s fund didn’t try to work any of that out. It just bought the list, all of it, and left it alone.

Almost too simple to matter. That’s what Wall Street thought in 1976.

Fifty years on, here’s what that “failure” turned into.

At the end of 2023, for the first time ever, more money sat in these buy-the-list index funds than in funds where someone is trying to pick winners. $13.29 trillion passive. $13.23 trillion active. Just over half.

The idea Wall Street laughed at in 1976 just won.

And almost exactly fifty years later, Vanguard took Bogle’s idea one step further.

Last month it launched a new global index fund here in Europe, Ireland-domiciled. Not just 500 big American companies. But 10,000 large, medium and small companies, across developed and emerging markets, worldwide.

Bogle started with one fund and $11 million that almost nobody wanted.

Fifty years later, you can buy most of the investable world in a single fund.

The idea didn’t just survive. It became almost absurdly easy to use.

Every one of those funds, old or new, works the same way underneath.

Picture an office fundraiser with one specific rule. Every payday, everyone hands in a slice of whatever they’ve got, and it gets split across the room, not equally, but in proportion to how big each person’s desk already is.

Doesn’t matter who had the best week. Doesn’t matter who actually pulled their weight. The split is decided by size, full stop.

That’s cap-weighting. A global index fund doesn’t ask whether a company had a good quarter. It looks at how big that company already is relative to everyone else, and hands it that same share of the new money coming in. Every payday. Automatically.

It’s not a judgment call. It’s an instruction.

You don’t need to know whether today’s market is expensive.

You don’t need to know which company wins next.

You don’t even need to know whether the next move is up or down.

That was Bogle’s whole point. Not that he’d worked out where the market was headed. He hadn’t, and he said so. His bet was simpler than that: nobody, including the smartest person on Wall Street, reliably knows what happens next. So stop trying to answer a question nobody can answer. Buy the whole list, and let time do the rest.

You don’t need an answer either. Nobody does. That’s the whole trick.

If nobody can reliably tell you which company wins next, the simplest answer is owning the whole list yourself. Not guessing which line item wins.

That’s exactly what I built the membership to actually do. Not another course to read and forget. A place to hold the whole list on purpose, with people around you doing the same thing.

The first 50 founding members lock in the lowest rate it will ever have, for life. Doors open on 15 September, and the waitlist hears first. Put your name down here.

So one question this week.

When you hear “the market is at an all-time high,” does it make you want to wait? Or does it make you want to own more of it?

That is it for this week.

This weekend I’m at my desk, building the actual platform the membership is going to run on.

Not the bike. Not the hammock. The build.

I haven’t been this excited about a piece of work in years.

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