An Investor's Guide to the Index Fund Controversy
11 Pages Posted: 24 Dec 2013
Date Written: November 1, 1976
Ideally, an index fund should provide the best possible tradeoff between expected return and risk for the investor who has no research advantage. A number of practical problems arise, however, when one attempts to translate this ideal into practice. Even in the absence of a research advantage, a managed portfolio can compete effectively with index funds in coping with these problems. But if such an advantage is available, the managed portfolio can capitalize on it.
Keywords: index fund
JEL Classification: G10
Suggested Citation: Suggested Citation