Bastardization Of Indexing
I often visit the website IndexUniverse.com, which as you can imagine has a focus on the world of indexed investments. But even though indexers are known more for their appreciation of science, facts and figures, the writers at IndexUniverse.com are really entertaining. Matt Hougan recently wrote a post titled Index Funds Behaving Badly. Here are some highlights from the article:
The highest annual expense ratio for an index mutual fund in 2008: 5.49%
Largest tracking error for an ETF in 2008: 11.9%
The post is designed to highlight some of the not-so-flattering points about indexing. Of course, with billions of dollars flowing into index funds and ETFs, it should come as no surprise that many product manufacturers are taking bad ideas from other areas of the industry to capitalize on where the money is flowing. It’s good for shareholders, but bad for investors. (The ultimate conflict? For more discussion on this, see the post on Vanguard. Vanguard is owned by it’s clients.)
Popularity: 2% [?]
Credit Repair - option trading<--Please click on the green Retweet button if you like this article and want to share it on Twitter!
You might like these Related Articles:
The questions and statements I am about to write are wayyyy out of the range of the documents here - ...
Personally, I'm not happy with Questrade. Their customer service is one of the worst. Also, I tried to withdraw money ...
Excellent interview though I would have to agree that it was sadly short.
Maybe you should start a periodic series on ...
@ Mark - thanks for the note.
@ Patrick - lol - perhaps there will be an opportunity to come back ...
Disappointingly short! It would have been better with another half hour of Preet. 
Good interview.
Not enough (current or former) advisors speak to the consumer. The individual investor who watched your segment learned ...
Great job. You handled yourself very well and professionally. Hope to see you more in the lime light!
Cheers,
The Rat 
I'll be sure to watch Lang and O'Leary exchange. It was great meeting you Preet. Hopefully, you can make another ...
Comment by Michael James on 30 August 2009:
I don’t suppose that the tracking error was 11.9% to the up side
Comment by Henry on 31 August 2009:
A category with 20 – 30 stocks should not be called an index. There is usually a very subjective way of selecting those stocks. I think Vanguard’s framing of “closet active management” applies to these narrow categories.