White Papers

View our latest commentary and insights on key wealth and investment topics below.

The Perils of Indexing

Index funds have become a popular means to gain low cost exposure to the market return for listed equities. A key factor driving this trend has been poor investment returns by the majority of active fund managers. Market returns, however, are highly volatile and subject to severe corrections when valuations reach extreme levels.

The problem for the long-term investor is that markets can take many years to recover from these corrections and it is difficult to mitigate against this risk when investing in broad based index funds. We believe that an investor’s long-term goals are best achieved through fundamentals driven investment strategies combined with sector specific or thematic index funds.