By Steven A. Schoenfeld

For over 3 many years, indexing has turn into more and more approved by means of either institutional and person investors.  Index benchmarks and funding items that tune them were a motive force within the transformation of funding procedure from artwork to technology. but traders’ realizing of the sophistication of this burgeoning box has lagged the growing to be use of index products.

Active Index Investing is the definitive consultant to how indexes are built, how index-based portfolios are controlled, and the way the world’s so much refined traders use index-based options to reinforce functionality, lessen charges and reduce the hazards of investing.

Active Index Investing presents a complete evaluation of (1) the funding theories which are the root of index established making an investment, (2) most sensible practices in benchmark development, (3) the transforming into global of index-based funding autos, (4) state of the art index portfolio administration techniq ues and (5) the myriad methods traders can and do seize the advantages of indexing.

Active Index Investing has a special layout that captures the perspectives and views of over forty of the funding industry’s major specialists and practitioners, whereas keeping a holistic view of this advanced material. as well as the Appendix and thesaurus in the ebook, it positive aspects an E-ppendix, to be had at

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Sample text

Part Five, the final section, is an exploration of why and how sophisticated investors use index-based products to minimize costs and risks, and maximize portfolio performance. In these seven chapters and six sidebars, readers see the perspective of large public institutional investors, financial advisors, and authors writing from the individual investor’s viewpoint. In what may prove to be the most valuable part of the book for some readers, the contributors provide numerous real-world examples of indexing for asset allocation, risk budgeting, and tax minimization.

To which Nobel Laureate Paul Samuelson replied, “People say that you’re settling for mediocrity [with indexing]. ” This book will not engage in that debate. As Chapter 3 indicates, for sophisticated investors, this debate is over, and the conclusion is both simple and elegant. What maximizes the efficiency of an overall portfolio is not “index versus active,” but instead, a combination of both approaches. This book shows the reader how smart cost- and risk-sensitive investors use the power of indexing to maximize portfolio performance and minimize risk.

S. and international equities, fixed-income, ETFs, and index-based separate accounts. As far as I know—and I asked a lot of people before embarking on this project—there has never before been such a detailed and comprehensive exploration of the index portfolio management investment process. The contributors have provided robust examples and even some entertaining war stories from the front lines of the battle to minimize costs and maximize tracking. Topics include index construction methodology, client needs and motivations, the underlying market microstructure, trading and transaction costs, and macroeconomic and other market-moving forces.

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