Index Universe and InvestmentNews have both been focusing on Vanguard principles and their effect on the market this week. InvestmentNews
' Jason Kephart
explains how the insight of John Bogle is just reaching financial advisers and institutions, who are now shying away from alternatives. A Morningstar Inc and Barrons 2012 alternative investment survey shows the majority of financial advisers say fees are the top reason to avoid alternatives. This is a first, as liquidity and transparency were the main concerns in the last four surveys.
The performance of alternatives wasn't great either, Kephart argues, so the average investor wasn't necessarily getting the best bang for their buck. The average fund lost 7.4 percent this year.
Keeping Vanguard in mind, IndexUniverse
. reflects on former Vanguard CEO, Gus Sauter's cardinal rule of indexing: An index must reflect the way that money managers actually invest, and expands on his theory in a seven page essay.
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