"Index Fundamentalism Revisited"

Journal Article (Academic article)

Is there any justification for investing in managed mutual funds or are managed funds for suckers, as indexing advocates argue? We answer this question by looking at a long time span of real fund returns (26 years) for one specific company (Vanguard) that is notable for its low fees on managed funds. By creating synthetic portfolios— portfolios based on weighted averages of the assets of Vanguard’s mutual funds—we find that whether index funds or managed funds are the superior buy depends on the time span in question, but that managed funds almost always have a lower standard deviation of return than index funds.

Duke Authors

Cited Authors

  • Reinker, KS; Tower, E

Published Date

  • July 2003

Published In

  • Journal of Portfolio Management

Start / End Page

  • 31 -