Which investment firm launched the first U.S. index mutual fund in 1976?

Vanguard Group launched the first U.S. index mutual fund in 1976.

The fund was originally called First Index Investment Trust and later became 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. The launch was initially viewed skeptically because the fund did not attempt to beat the market through active trading.

John C. Bogle founded Vanguard in 1975 after developing the idea that investors could benefit from broad diversification and low costs. Vanguard’s mutual-fund structure is distinctive: the funds own Vanguard, and fund shareholders therefore indirectly own the management company. This arrangement is intended to align the company’s economics with investors’ interests.

The 1976 fund was not the first index fund anywhere; institutional index products had existed earlier. It was, however, the first index mutual fund offered to the general U.S. public. The fund’s growth helped make passive investing a central force in modern markets.