Four decades ago, despite protests from insiders that his idea would bring doom to the mutual-fund industry, Jack Bogle went ahead with his plan to create a mutual-fund company owned not by its founders, but by the shareholders in the funds themselves, writes Holman W. Jenkins Jr. for The Wall Street Journal.

His other idea, to create an index fund that would mimic the performance of the overall stock market instead of paying managers to speculate which stocks might go up or down, insured not only success but the longevity of the company.

On its 40th birthday, Vanguard 500 Index Fund now holds more than $3 trillion in mostly passively managed, index-style investments on behalf of its 20 million investor-clients. However, the prediction of doom for the mutual fund industry seems to be coming true for many except Malvern’s Vanguard.

“The fund industry took in $87 billion . . . of which $224 billion came into Vanguard,” said Bogle in an interview with The Wall Street Journal. In other words, “in the aggregate, our competitors experienced capital outflows of $137 billion.”

However, Bogle believes index funds are heading for a decade of depressed returns, and he recently warned investors of this. When it comes to investing, Bogle reiterates that it is always an act of trust, primarily in “the ability of corporations to continue, through efficiency and entrepreneurship and innovation, to provide substantial returns.”

Read the entire interview at The Wall Street Journal here, and check out previous VISTA Today coverage of Vanguard here