The idea of an index fund seemed a bit of a joke at first. 40 years and $3.6tn later, the Vanguard Group has certainly pioneered the world's foray into the world of passive management.
Then it started living up to the theory, beating three-quarters of competing mutual funds during the rest of the 1980s. Other firms started experimenting with index funds in the mid-1980s, though they charged higher fees, which dampened their appeal. Vanguard kept lowering its fees and putting out new index funds to capture the returns for small stocks, the total U.S. stock market, international stocks, and the bond market.