By LARRY SWEDROE
The active investment management community has been attacking indexing—and passive investing in general—for decades. The reason is obvious: its profits (and for many firms, their very survival) are at stake. The attacks began almost from the moment John Bogle started the First Index Investment Trust (later renamed the Vanguard 500 Index Fund) on December 31, 1975. At the time, competitors uniformly derided it, even calling it “un-American” and “Bogle’s folly.” Now-retired Fidelity Investments Chairman Edward Johnson was quoted as saying he couldn’t “believe that the great mass of investors are going to be satisfied with receiving just average returns.” One of the great ironies is that Fidelity is now one of the leading providers of index funds. It was also the first fund family to offer a zero-expense-ratio index-based ETF.
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