Index Funds Outperform Actively Managed Funds
Nicole Dieker

This is a very important story that has been under-reported/recognized. Jack Bogle of the $4.2 trillion Vanguard funds has said this for years (probably decades?). Great NYT (4/14) article on Vanguard . Vanguard is the king of index funds taking in $1–2 billion a day and is effectively owned by the fund holders.

One consideration — as these indices outperform and more money is simply dumped in indices, the underlying stocks might be a bit inflated (although I would not bet against that). And naturally, if the market declines, fund withdraws will put even more pressure on the stocks in the big indices…feeding more withdraws.

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