- How do the active decisions made by index providers, such as stock selection and rebalancing methodology, impact the overall performance of index funds?
- What strategies can institutional investors employ to better understand and evaluate an index fund?
- What are the pros and cons of alternatives to index funds to enhance overall returns, including factor funds, and what metrics are the most effective to capture premiums?
- How significant are the performance disparities among indices that track the same market, and how can investors leverage insights into these disparities to enhance their portfolio outcomes?
Is passive more active than you think?
WE'LL SEE YOU IN
ABOUT THE EVENT
Wealth managers face mounting cost pressures, and many have responded to this by integrating some degree of indexing into their portfolios. This means some of the largest investment managers compete against each other, offering funds which ostensibly track exactly the same index. It has also led to a growing number of funds which track increasingly niche indices.
Perhaps most significantly, the intricate decisions made by index providers, such as the selection of stocks, the methodology for rebalancing, and the timing of reconstitution announcements, introduce an element of active management that can produce disparate returns. Recognising the complexity and impact of these decisions is crucial for wealth managers - particularly in light of Consumer Duty.
The hidden costs associated with index rebalancing, rigid index structures leading to missed opportunities due to style drift, inefficient cash flows, and front-running vulnerabilities are all areas of concern for DFMs. How can investors better evaluate these active decisions, and what are the long-term implications for fund performance?
Hosted by Asset Allocator in partnership with Dimensional Fund Advisors, this breakfast roundtable, chaired by David Thorpe, Contributing Editor for Asset Allocator, and conducted under Chatham House Rule, will convene Chief Investment Officers, Heads of Research, and other investment experts to delve into the active decisions made by index providers. The discussion will offer a comprehensive insight into the critical role of diversification and flexible implementation in optimising returns.
KEY DISCUSSION POINTS
Asset Allocator is a newsletter tailored to wealth managers, fund selectors and discretionary fund managers.
The service’s proprietary fund and asset allocation databases, compiled using information provided by the UK’s leading DFMs, give readers unique insights into the issues that drive investment decisions.
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