The case for low-cost index fund investing

April 26, 2018

 

Indexing's popularity among investors has shown few signs of waning. Proven long-term performance, regulatory changes, the introduction of index ETFs, and increased awareness of the benefits of low costs have made indexing a global trend. But is it a trend that will last?

This paper explores the theory behind index fund investing and whether indexing can maintain its levels of success and popularity for the foreseeable future.

Use this paper to:

  • Review the conceptual and theoretical underpinnings of index fund investing.
  • See how the zero-sum game, the effect of costs on returns, and the challenge of persistence help support the case for low-cost index fund investing.
  • Understand the circumstances that may cause an indexing strategy to look more or less appealing in the short term.
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Additional materials

Notes:

  • All investments are subject to risk, including possible loss of principal.
  • Investors cannot invest directly in an index.

 

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