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Investors blew it, big time.

Last month, shareholders of the $108 billion

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Vanguard 500 Index pulled a net $740 million out of the fund, according to Daniel P. Wiener, editor of the

Independent Adviser for Vanguard Investors

newsletter.

It was the first time the omnipotent index fund suffered monthly outflows since August 1993, Wiener says.

The exodus came just as the

S&P 500

index was coming back to life following a sluggish 1999. Since Feb. 25, the benchmark is up 12%.

Though the index has returned 20% or more for five straight years, it lost favor with investors last year after being surpassed by the average mutual fund, which returned 28.4%, and the

Nasdaq Composite

index, which returned 85.6%.

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In the first three months of 2000, investors put just $330 million into the Index 500 fund, well below the $4.6 billion they plowed into that portfolio during the same time period last year.

In fact, for March, the fund was the biggest asset loser at the Vanguard complex, says Weiner.

But the money didn't go far. It appears to have moved just down the hallway to some of Vanguard's other offerings.

"People started moving out of 500 and moving into the

Wilshire 5000

,'' says Weiner, noting strong March inflows totaling $330 million into the

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Total Stock Market Index fund, which tracks the Wilshire 5000 index.

The broad Wilshire index includes many more small- and mid-cap stocks, which had been strong gainers until recently. But while the S&P 500 rose 9.7% in March, the Wilshire 5000 gained just 5.8%.

Vanguard did not return calls seeking comment.

Those outflows helped to delay the day when Vanguard 500 would surpass

Fidelity's

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Magellan fund to become the biggest mutual fund in the world. Wiener estimates the Vanguard fund is about $700 million behind its Fidelity rival.