Beware of Index Fund Fundamentalists

Abstract

This article recasts earlier research on index fund performance. A different time period shows the opposite results for index fund superiority over actively managed funds. Over the past 20 years, the end result is that neither passive nor active management as a whole wins, as common sense would suggest. Even if active management as a whole were to lose in the future, it is shown how one may use active management to create superior portfolios.