Critics called it un-American before it made anyone rich
John Bogle's first index fund was mocked as a fund for people who'd given up on winning. It just won differently.
When John Bogle launched the First Index Investment Trust in 1976, the reaction from the investment industry wasn't skepticism. It was contempt. Critics nicknamed it "Bogle's Folly" and called the whole idea un-American — a fund with no star manager, no hot stock picks, and no ambition beyond mirroring the S&P 500 exactly, fees and all. The pitch amounted to: stop trying to win, and you'll do better than most people who try.
The underlying case had been building in academic finance since the 1960s, where University of Chicago researchers kept finding the same uncomfortable result: professional managers, on average, struggled to beat the market after fees, and the fees themselves were the largest predictable drag on long-term returns. Bogle didn't discover this. He built a product around taking it seriously.
It was not an instant success. Individual investors were cool to a fund that promised, by design, to never beat the market. Wall Street had even less reason to embrace a structure that shrank its own commissions. But three decades later, economist Paul Samuelson ranked Bogle's invention alongside the wheel, the alphabet, and the printing press — and Warren Buffett became one of its loudest public admirers.
The fund never tried to be clever. That refusal to be clever, sustained for fifty years against constant ridicule, is the part almost nobody predicted would age well.