The first publicly available index fund was a mutual (or managed) fund, launched by the Vanguard Group in 1976 in the US. Jack Bogle was the brains behind the fund. The idea was initially slow to catch on, there was only active funds (an active fund is one where the manager tries to pick and chose the best stock or investment) available prior to this point.
Fast forward to today and globally there are >3,000 index and exchange traded funds tracking every asset class, investment category and style know to mankind.
How things have changed!
Although many of these ETFs are technically index funds some are closer to active funds in terms of the investing style used.
Fast forward to today and there are >3,000 index funds tracking every asset class, investment category and style know to mankind. How things have changed.
Exchange Traded Funds
The other main change has been an ongoing shift by investors from Managed Funds to Exchange Traded Funds, in both Australia and Overseas. Although Managed Funds are still the larger component, ETFs now represent 10% of the total assets invested in indexed managed funds, which in turn are approx 10% of the total managed fund pool.
In Australia the rule of 10 for the ETF segment is as follows :- ‘ETFs are now 10% of indexed managed funds which in turn are approx 10% of the total managed fund pool. Therefore ETFs are now 1% of unlisted managed funds in Australia’ Source ETF Consulting Report – “Aqua II – key considerations, costs and criteria for issuing managed funds and ETFs on the ASX”