Practical analysis for investment professionals

Index Funds


Top Five Articles from August: The Market in Wartime, Sam Zell, Fund Names

Leading posts from August include Preston McSwain's call for more honest and accurate fee disclosures and performance reporting; an examination of Sam Zell's take on the economy by Julie Hammond, CFA; tips on how to ace job interviews by Julia VanDeren; Will Ortel's exploration of what's in a hedge fund name; and an analysis of capital markets during times of war by Mark Armbruster, CFA.

Do Index Fund Portfolios Live Up to Expectations?

Are investors expecting more than index funds can deliver?

Beat the Field by Shooting Par

"What if, instead of trying to beat the market, investors focused on outperforming other investors by earning investing’s equivalent to par?" asks Dougal Williams, CFA.

Keep ETFs Weird

The ETF has been at the forefront of three major investment phenomena over the past two decades, and as a result has had a positive effect on the investment world, says Tadas Viskanta. The beauty of the ETF industry is its embrace of new ideas and strategies. Tamping down on that would only serve to make the investment world a less interesting place. So let's "Keep ETFs Weird."

Fundamental Indexing in the Bond Market: An Interview with Lidia Bolla, CFA

Lidia Bolla, CFA, takes the basic model of factor exposure and applies it to the concept of fundamental indexing in the bond market in her new article, "Fundamental Indexing in the Global Bond Markets: The Risk Exposure Explains It All." She discusses her findings in an interview with Ron Rimkus, CFA.

Where Active Management Can Win

Active fund management is alive, thriving, and adding value across trillions of dollars of assets worldwide.

Book Review: The Index Revolution

Author Charles Ellis, CFA, contends that structural changes in the US market have eliminated the prospect of outperforming average market returns, after fees, through active management. The causes include the rise in institutional and high-speed machine trading and changes in regulation. Active management may still pay off in low-efficiency markets, such as high-yield bonds and emerging market debt. The book does not address findings that the most active stock pickers who take large but diversified positions unlike the index weightings beat their benchmarks.

Are Index Funds the Best Way to Own Preferred Stocks?

Preferred stock index funds are a double-edged sword, says David Allison, CFA, CIPM. They are a simple, liquid, and low-cost way for investors to gain exposure to preferreds, but their simplicity makes them a blunt tool and harbors risks.

Is Active Management Dead? Not Even Close

Rumors of active management's demise are greatly exaggerated, AthenaInvest's C. Thomas Howard tells Jason Voss, CFA, and he has the evidence to make his case and the tools to help change active management for the better.

Academic Finance as a Check on Pretensions

Investment professionals recognize that the markets are messy places, filled with less than rational participants. From their perspective, this can obviate any further discussion about the value of academic finance and its models. But this puts too high a threshold on the measure of academia.