Originally Posted by John Bogle in the Wall Street Journal
The idea that passive equity management could outpace active management—then the mutual fund industry's universal strategy—was derogated and ridiculed. The fund, now called the Vanguard 500 Index Fund, was referred to as "Bogle's Folly." Yet today indexing has come to dominate the field. Over the past five years, index funds have accounted for 100% of all equity funds' cash flows, with assets now totaling $2 trillion, one-fourth of all equity fund assets.
My naive reading of that would be "100 percent of all funds went into index funds", which can't possibly be true.
Is that supposed to mean that the money coming in to and going out of actively managed funds was a NET of zero, with the money coming in balanced by the money being withdrawn or transferred into other investments? Thus, the index funds accounted for 100% of the net (incoming) cash flow.
Or am I somehow way off base here?