The Morningstar headline grabbed me. “Why Are These Big Index Funds Underperforming?”

By definition index funds, if they’re doing their jobs properly, don’t outperform or underperform. They simply match their benchmarks less a bit for their expenses. Generally, when talking about outperformance or underperformance it’s active funds that get the attention—index funds are the yardstick against which those active funds are compared.

But Morningstar said big index funds were “underperforming” so, I had to know how. In particular, while not really caring about some of the “other” index fund operators I did want to know by which metric Vanguard’s big index funds were lagging.

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