Vanguard Launches First Index Fund For US Retail Investors 46 Years Ago Today

Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.

What Happened? On this day in 1976, Vanguard launched the first retail index mutual fund.

Where The Market Was: The Dow Jones Industrial Average closed at 973.74 and the S&P 500 traded at 102.91.

What Else Was Going On In The World? In 1976, Steve Jobs and Steve Wozniak formed Apple, Inc. AAPL. The hit Sylvester Stallone movie “Rocky” was released. The average cost of a new house was $43,400.

Birth Of The Retail Index Fund: Back in August 1976, Vanguard founder John Bogle launched the Vanguard First Index Investment Trust, the first U.S. index fund available to retail investors. Bogle created the passive fund to simply track the performance of the S&P 500 and minimize investor fees.

Related Link: Vanguard Founder John Bogle's Biggest Investing Mistake

At the time of its launch, the fund’s $11.3 million in assets was well short of Bogle’s $150-million goal, but its popularity quickly skyrocketed. The fund’s assets grew at a compound annual rate of 53% during its first 20 years.

Today, the fund is called the Vanguard 500 Index Fund Investor Shares, and stock traders can access it via its ETF form, the Vanguard 500 Index Fund VOO.

The VOO ETF has a minuscule 0.04% expense ratio, which has allowed it to track the S&P 500 extremely well.

Since its inception in 2010, the VOO fund has generated a 376.7% total return.