Setting the record straight: Truths about indexing
21 June 2018 | Portfolio construction
Indexing has grown substantially during the past several decades, leading to dramatic changes in the way people invest. Despite indexing's benefits, its growth has led to criticism about its potential impact on the capital markets. Vanguard believes this criticism is largely unfounded. In our paper, we:
- Quantify the benefits of indexing.
- Clarify the definition of indexing.
- Analyse the effects of indexing on market volatility, liquidity and active management.
Investment risk information
The value of investments, and the income from them, may fall or rise and investors may get back less than they invested.
Other important information
This article is directed at professional investors and should not be distributed to, or relied upon by, retail investors.
This material is for professional investors as defined under the MiFID II Directive only. In Switzerland for institutional investors only. Not for public distribution.
This material was produced by The Vanguard Group, Inc. It is for educational purposes only and is not a recommendation or solicitation to buy or sell investments.
Issued by Vanguard Asset Management, Ltd, which is authorised and regulated in the UK by the Financial Conduct Authority. In Switzerland, issued by Vanguard Investments Switzerland GmbH.