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Active Investment Management

Passive Investment Management (Index Funds)

Index vs Active Managers

Smart Investing - A Better Way To Invest

Core - Satellite

Academic Research

Fundamental Index Performance

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The Index Fund Revolution

Over the last few years, indexation and passive investment management strategies have become very popular in the media. Unfortunately, they remain poorly understood by the large majority of investors. In the following sections (see the menu items on the left), we will explain the genesis and evolution of indexation.

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Over a full twenty-two years, the FTSE RAFI Canada Index outperformed the S&P/TSX Composite Total Return Index. While you cannot invest directly in an index, you can invest in a fund that tracks an index.

Before fees, $10,000 that tracked the Canadian Fundamental Index would have grown to $106,480 whereas the same $10,000 that tracked the S&P/TSX Composite Total Return Index would ony have grown to $49,738.

$10,000 invested in the Morningstar Canadian Equity Fund Average Index would only have grown to $34,246. However, it should be noted that this index is NET of fees, unlike the previous two. Having said that, the cost of tracking the passive indices is a fraction of the difference in performance.