ABSTRACT
The 1990s are going to be known as"The decade of the index fund," For various reasons, both institutional and retail investors have been flocking to index funds in record numbers, (see Figure 1) At the same time, investors are fleeing this county's largest active mutual funds. The Vanguard 500, for example, has recently risen to the number two spot with assets over $40 billion. Mutual fund investors are learning what pension fund managers have been learning for over 20 years, which is index funds offer investors many advantages. The most significant advantages are lower cost, consistent performance, and better diversification.
