Articles (18)

Believe it or not, many plan sponsors of institutional investment plans do not have a reliable benchmark to judge their total performance over time.  How can this be?  What could be more fundamental ...Read More

Imagine after 40 years of being a professional money manager, you look back and say, “I was the chosen one.” Making it through events such as the Oil Crisis of 1973 and the stagflation of the ...Read More

We recently wrote an article that gave a high level overview of the performance of 64 different equity funds from Fidelity Investments. Our goal was to inform investors to be very careful when they hear ...Read More

The active fund industry is notorious for deceiving investors. We mean deceitful in terms of not giving investors the full-picture of their particular fund’s performance. To give an analogy, if we told ...Read More

As we were enjoying our Thanksgiving Day weekend, this Jason Zweig column in the Wall Street Journal caught our attention.  Zweig quotes Denys Glushkov, a senior researcher at Wharton Research Data ...Read More

When discussing the issue of style drift with prospective clients, we commonly hear an objection that goes something like, “Why should I care where my fund manager chooses to invest, as long as he is ...Read More

Borrowing the definition from a recent Vanguard study, "Tactical asset allocation (TAA) is a dynamic strategy that actively adjusts a portfolio's strategic asset allocation (SAA) based on short-term market ...Read More

In Step 6 of IFA’s 12-Step Recovery Program for Active Investors, we analyze the problem of style drift, the tendency of active managers to buy securities outside of their mandate. Normally, style drift ...Read More

Fama and French identified risk factors in 1992 that highly correlate with long-term historical returns, namely company size and value ...Read More

As a registered investment advisor, Index Funds Advisors, Inc. is constantly solicited by mutual fund companies and ETF (exchange-traded fund) providers hoping to convince us to use their products for our ...Read More

Introduction Recently, many investors have succumbed to one of the siren songs of active investing, sector-picking. They believe that they can predict which industrial sectors will outperform the total market ...Read More

Is there change on the horizon? A recent article in Bloomberg Businessweek by Charles Stein details the disenchantment investors are experiencing with stock pickers. Mutual funds that invest in domestic ...Read More

Investors who use index-linked exchange-traded funds to slice and dice various parts of the U.S. market can choose from benchmarks from Russell, S&P/Barra, and Dow Jones. ...Read More

The Holy Grail of investing is to develop a methodology that enables an individual to identify, in advance, the top-performing mutual funds. Unfortunately, while it is always easy to identify the top ...Read More

As investors examine year-end performances of their index funds, one measure they should not focus on too closely is tracking error. Keeping a portfolio reasonably close to its intended index is desirable, but ...Read More

What a difference two years can make. In 1999, only 33% of mutual funds were able to beat Standard & Poor's (S&P) 500. In the year 2000, over 72% of all mutual funds managed that task. Nearly half of all funds ...Read More

A doubling of the price-earnings ratio occurs when r-g is cut in half. If r-g is 6%, then the P/E ratio for a stock or index is 16.7. If r-g is 3%, then the P/E ratio is ...Read More

Actively-managed funds often start out as one kind of animal and slowly evolve into something totally different over time. For investors who care about developing asset class portfolios with funds that stay ...Read More