Newton’s third law of motion can help advisors evaluate index-based funds. Jim Rowley offers some investing corollaries.
Stock market dispersion is the best measure to determine whether active managers have the opportunity to outperform the market.
The increased use of passive products doesn’t necessarily mean more passive allocations—investors are still building active portfolios.
Do actively managed funds outperform passive funds in a bear market? Our research says they’re not quite the ruby slippers of investing.
Are there too many ETFs? Are they too niche in nature? We’ve seen it all before with mutual funds.
The case for indexing is predicated on the zero-sum game and the associated effects of costs, meaning that low- cost indexing should beat the average active manager over longer periods of time. However, sometimes investors may be better off with low-cost active choices.
Jim Rowley blogs about Dunn’s Law, an alternative explanation to dispersion as a contributing factor to active manager outperformance.