The stock is the proof of the ownership of the company. If you own shares, it proves that you own part of the company. The earliest stock in the world was issued by the Dutch East India Company in 1602, and the earliest trading market was the Amsterdam Stock Exchange at that time. It is said that the East India Company has paid dividends to shareholders at a dividend rate of 18% for 200 consecutive years. Now it seems that this is a miracle.
It is worth mentioning that new york, the world financial center, was also founded by the Dutch. At the beginning of new york's construction, it was called "New Amsterdam". 1664, New Amsterdam was captured by the British and renamed as "new york", that is, "new york". York was then the capital of England. Now the literal English translation of "WallStreet" is "Wall Street". This was a defensive wall when the Dutch ruled new york.
There are so many stocks in the stock market that there are ups and downs. How to measure the overall ups and downs and describe the market trend? So there is an index. The stock index mainly measures the price level of the stock market.
The oldest index in the world is the Dow Jones Industrial Average, which is what we usually hear. 1896, published by charles dow. The Dow Jones index originally contained 1 1 stocks, but in 0928 it increased to 20 19 16 and 30 stocks. The earliest number was 40, and now it is 25000.
Eighty years after the stock market index appeared, that is, 1976, the world's first index fund, Pioneer 500 Index Fund of Pioneer Group, followed closely the S&P 500 Index of the United States.
Speaking of the first index fund, I have to mention one person, John Borg, who is the issuer of this fund, the founder and chairman of Pioneer Group, and is known as the "father of index funds". Fortune magazine listed John Berg as one of the four investment giants in the 20th century.
Some people compare John Berg to modern Benjamin Franklin. Some people say that he has contributed more to individual investors than anyone else in American history.
His honor lies not in his investment level and high return on investment, but in his contribution to index funds and in his opening up an effective investment road for ordinary people.
Before Borg, the theory of index fund has existed for a long time, and many scholars are studying whether there is an optimal portfolio.
1965, Samuelson, a famous economist at Massachusetts Institute of Technology, wrote a paper, the main point of which was that "the past performance of stocks has no influence on the future", which became a famous random walk theory, holding that stock prices walk randomly.
In the same year, Eugene Farmar of the University of Chicago further put forward that "the market is efficient, and the stock price reflects all available information, so that the stock can be fully priced at any time", which is the famous efficient market theory.
Theoretical research shows that no one can outperform the market for a long time, and the most effective portfolio is the market itself, that is to say, we have no reason to invest in other portfolios except the index portfolio.
But all this stays at the theoretical level and has never been put into practice. There are many reasons, but the core is that fund companies are unwilling to accept this investment concept: that is, funds or professionals can't beat the market and get higher than the market average. They think they can beat the market and think that index funds are an insult to their wisdom. Most importantly, due to the low rate of index funds, senior managers of fund companies do not enjoy high salaries.
From this point, we can also see the greatness of Borg, or pity others. He is like a child who sees the emperor's new clothes. He not only saw it, but also said it.
Therefore, he spared no effort to expose the drawbacks of the fund industry all his life and devoted himself to providing index funds with low rates, low risks and stable returns for the people. He is known as "the conscience of the investment community". If you know his experience, you must agree with this view very much.
It is no accident that John Berg became the first person to eat crabs. 1949 He saw an article "Making a lot of money in Boston" in Fortune magazine, which emphasized "a rapidly expanding and controversial industry-* * * the same fund".
1950, Borg is about to graduate from Princeton University and prepare to write a graduation thesis entitled * * * with the Fund. The title of the final paper is "The Economic Function of Investment Companies", which covers the history and development of the fund industry, and puts forward some suggestions: first, clarify the objectives of the fund; Second, reduce sales commission and management expenses; Third, don't promise that your performance is better than the market average.
This article is far-sighted, even today, it still has great value, which can be said to foresee the future of the fund industry. Therefore, the seeds of changing the fund industry have long been in Borg's heart. It was not until 1975 that he finally had a chance to put his ideas into action.
At that time, Borg's graduation thesis attracted the attention of industry leaders, and was later appreciated by WalterMorgan, who was in charge of WellingtonManagementCompany at that time, and let Borg work in Wellington Management Company immediately after graduation.
1966 is the successor of Wellington management company, but later, due to the serious losses caused by the stock market decline during the period from 1973 to 1974, Borg was voted off by the board of directors. 1974 started a new business and established Pioneer Group. 1975 is ready to set up an index fund, copy and track the Standard & Poor's 500, and 1976 was officially issued.
Like many things, although the future is bright, the road to start is not smooth. The Pioneer 500 Index Fund planned to raise $65.438+0.5 billion, but in the end it only raised $654.38+0.65438+0.00 million. As a new thing, it has not been accepted by most people. The fund industry is even more pessimistic, saying that he is doing an extremely absurd thing. But after all, index funds have started.
Seven years later, the second index fund appeared in the market, and 10 years later, Pioneer Group launched the bond index fund. Later, more and more companies launched different index fund products.
ETF is the main trend of index fund development in the future. The first ETF appeared in Canada at 1990. Overseas, ETF has become the most important variety of index investment, reaching nearly $3 trillion by 20 15.
Index funds have fully proved their position in time. The size of the Pioneer 500 Index Fund has soared from the initial 1 1 million dollars to 1 1000 billion dollars.
At present, index funds account for one-third of all equity funds, with a scale of more than 4 trillion US dollars, and are accelerating the occupation of the territory of actively managed funds.
Let's take a look at two comparisons made by Borg. One is 1945 to 1975. The annualized rate of return of the Standard & Poor's 500 Index is 1 1.3%, while the annualized rate of return of active funds in the same period is only 9.7%, and the cumulative excess return of the index in 30 years can reach 863%. The second time is from 1985 to 20 15, and the S&P 500 returns are 1 1.2%. In the same period, the annualized rate of return of active funds was 9.6%, and the cumulative excess return of 30-year index reached 94.6%.
Finally, talk about the development of index funds in China.
The first domestic index fund was born in 2002, and the first ETF appeared at 20 1 1, which is the SSE 50ETF of Huaxia Fund.
After years of development, there are more types now. From the perspective of investment targets, it can be divided into stock funds, bond funds, commodity funds and QDII (qualified domestic institutional investor) funds. Of course, stock index funds account for the highest proportion, accounting for more than 80%.
From the perspective of transaction types, it can be divided into three categories: OTC index funds, ETFs and LOF. However, compared with foreign countries, the development of index funds in China can only be regarded as the initial stage, and both the total scale and the proportion of fund industry are relatively small, and the future development prospects are promising.