Today’s passive index investing requires active choices, as customization and innovations in index funds have resulted in new considerations for investors and the potential for greater control.
Key Points:
- With the proliferation of index investing, investors must understand that “passive” investing requires active choices.
- Investors who understand the variables and nuances in index investing can make active decisions, customize their portfolios and have greater control.
- With index investing options on the rise, investors should stay current on the landscape and continue to make active decisions that support their goals.
Passive index funds continue to accumulate market share relative to active managers by offering cost-effective market exposure and strong relative performance across many popular market segments. One catalyst for this adoption is the perceived simplicity and efficiencies offered to investors, but viewing passive indexing as simple and straightforward ignores other key features.
The passive investing landscape has evolved significantly in recent years, with a notable proliferation of indexing options. Today’s passive investing requires active choices, as customization and innovations in index funds have resulted in additional variables to consider, while providing the potential for greater control over investments.
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