Vanguard created the first widely recognized index fund for individual investors in 1976.
The fund was launched as the First Index Investment Trust, later renamed the Vanguard 500 Index Fund. It was designed to track the performance of the S&P 500 rather than rely on a manager to select individual stocks in an attempt to outperform the market.
The launch was associated with Vanguard founder John C. Bogle. The fund initially attracted less money than expected, but its low-cost, broad-market approach later became a major part of investment practice.
An index fund can be structured as a mutual fund or an exchange-traded fund. Tracking an index does not guarantee identical performance because fees, trading costs, taxes, and tracking differences affect results. Vanguard’s 1976 fund is distinct from the first U.S.-listed ETF, which launched later.