Infographic: Advocating for indexing's benefits

October 8, 2018


Setting the record straight: Truths about indexing advocates indexing's benefits as a strategy for wealth creation. Take a look at how indexing drives down the cost of investing and helps investors achieve their goals.

The benefits of indexing are clear

Indexing has helped millions of investors achieve their goals.

Index funds provide relative performance predictability.

Indexing has helped investors keep more of their returns.

Bottom line: Investors recognize the benefits of low costs.

Truths about indexing infographic series

This is the third of a three-part series. Don’t miss part one, Defining indexing, and part two, Defending indexing.

1 Shaded regions depict the range of returns between the 75th and 25th percentiles for U.S. equity active and index strategies. Returns are defined as rolling 12-month excess returns relative to a prospectus benchmark on a monthly basis. The sample of U.S. equity funds is defined by Morningstar U.S. category group
Sources: Vanguard calculations, using data from Morningstar, Inc.

2 Data reflect the difference between the cumulative expense ratio fees paid by investors owning open-end funds versus what they hypothetically would have paid if index funds did not exist. Investor savings are calculated as: (asset-weighted expense ratio of actively managed funds x industry assets).
Sources: Vanguard calculations, using data from Morningstar, Inc.

3 Expense ratio quartiles were calculated annually. Equity funds are represented by Morningstar U.S. equity category. Each quartile represents 2016 asset-weighted average expense ratios, determined by multiplying annual expense ratios by year-end assets under management and dividing by the aggregate assets in each quartile. Data are as of December 31, 2016.
Sources: Vanguard calculations, using data from Morningstar, Inc.

All investing is subject to risk, including possible loss of principal.

Diversification does not ensure a profit or protect against a loss

© 2018 The Vanguard Group, Inc. All rights reserved.


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