Although index-funds have long been touted as the fund choice of the buy and hold investor, the net outflow of assets in the Vanguard 500 fund is evidence of an underlying fickleness on the part of index investors, said Daniel P. Weiner, editor of the Independent Adviser for Vanguard Investors.

"I think there is absolutely no question that index fund investors chase performance as much as any other investors," he said. "And when performance lags, interest lags, and eyes begin to wander and dollars begin to wander."

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.