The Actively Passive Trend: Indexes Get a Makeover

by Maria Crawford Scott

The Actively Passive Trend: Indexes Get A Makeover Splash image

There once was a time when index fund investing offered a simplified approach to portfolio management.

You would simply take your pick among a small number of index mutual funds that covered a small number of well-known indexes, and you would have a well-diversified, tax-efficient portfolio with rock-bottom expenses.

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However, the immense popularity of index funds led to the creation of numerous new stock indexes, as well as the invention of a whole new type of index fund investing through the use of exchange-traded funds (ETFs)—passively managed portfolios that track an index but trade on an exchange like an individual stock.

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