ฝัง
- เผยแพร่เมื่อ 19 มิ.ย. 2024
- The terms passive investing and index investing are often intertwined, but they are not exactly the same thing. Today’s guest is Adriana Robertson, the Honourable Justice Frank Iacobucci Chair in Capital Markets Regulation and an associate professor of Law and Finance at the University of Toronto Faculty of Law and Rotman School of Management. Adriana is interested in index investing and, in this episode, we hear her views on whether or not index investing is passive. Hear facts from her paper on the S&P 500 Index fund specifically, and all of the reasons that it's not passive, as well as some of the issues that are potentially arising from the creation of so many indexes or so-called passive investments. A more recent paper by Adriana, published in The Journal of Finance, surveyed a representative sample of U.S. individual investors about how well leading academic theories describe their financial beliefs and decisions, and Adriana shares the differences in something like value growth from an academic perspective versus a real-world perspective. Find out how investors can go about evaluating the performance of their portfolios and what they should be looking for when deciding which index fund to invest in, as well as why index funds aren’t a meaningful category anyway, factors from Adriana’s surveys that might influence investor’s equity allocation, and the trend towards indexing and whether it will overtake active portfolios. Tune in today for all this and more!
Links From Today’s Episode:
Adriana Robertson on Twitter - / adri_robertson
Adriana Robertson on LinkedIn - / adriana-robertson-bb66...
Adriana Robertson - sites.google.com/site/adriana...
Passive in Name Only - digitalcommons.law.yale.edu/y...
What Matters to Individual Investors? - onlinelibrary.wiley.com/doi/a...
Rational Reminder on iTunes - itunes.apple.com/ca/podcast/t....
Rational Reminder Website - rationalreminder.ca/
Benjamin Felix - www.pwlcapital.com/author/ben...
Benjamin on Twitter - / benjaminwfelix
Benjamin on LinkedIn - / benjaminwfelix
Cameron Passmore - www.pwlcapital.com/profile/ca...
Cameron on Twitter - / cameronpassmore
Cameron on LinkedIn - / cameronpassmore - แนวปฏิบัติและการใช้ชีวิต
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Thanks it really helps open up some angles looking at index funds I didn't think of… nearly fainted when she said 'I read all the prospectuses of US index funds"
Her descirption of the right hand left hand benchmark builders and fund managers made me think of the relationship between banks and credit rating houses from the financial crisis. Its not a perfect analogy but the ground work is there for investors to get rolled by some wall street types. A good warning to never get complacent with your investing decisions!
P.S. thats a smart lady and great guest
Don't know why you guys headline show as investment advice for Canadians. I'm from U.K and love your show and informative interviews. Think this stuff applicable to investors where ever they are. Spread the net wider chaps 🙂 lots of people would benefit from it
We agree with you. Almost 50% of listeners are from outside Canada. Glad you find some value from the RR.
We agree from Brazil 🇧🇷
From Singapore, agreed
The S&p 500 serves as a standard that makes comparison easy across various benchmarks. If you can buy it at 3 bps (VOO) then all the factor funds and others that use far more obscure benchmarks at a (usually) much higher cost have to justify their performance. As a standard, it’s easy to follow, readily available to even the most obtuse investor and tracks the US total stock market almost perfectly. While not technically “passive” it’s useful and anyone straying from it should be made to justify why it’s not a useful measurement: you’ll likely find that they’re selling a less liquid and higher fee product that over time will likely result in poorer performance
If the S&P500 isn't passive, is VTI Total Stock Market index passive?
They've had almost exactly the same performance
@@itsjacob7239 exactly. Once you get enough holdings (for diversity) it just becomes a question of scale. Like a 500 person choir versus a 25000 person auditorium: they end up sounding pretty much the same. VTI is the entire (US) market, the 500 is 80% and mimics the whole. The problem is when certain funds want to be measured against something that is not the entire market, for whatever reason, you find they’re hiding something in the name of ignoring the “ bad stuff” in the whole market and charging a fee for it. So you pay for factor fund management and realize after a few years they underperformed the entire market
@@rickyaz8640 they are 80% of the market, but not 80% of the stocks in number, that's the difference. So you miss on small factor.
@@itsjacob7239 past performance does not guarantee future results. I would recommend watching the Ben Felix video titled “investing in the s&p 500”. It might change your mind.
Probably the best podcast so far. Super interesting and great questions.
I dont mean to be offtopic but does anyone know a tool to log back into an instagram account..?
I was stupid forgot the login password. I love any help you can offer me.
@Mitchell Russell Thanks for your reply. I got to the site thru google and I'm in the hacking process now.
Seems to take a while so I will get back to you later when my account password hopefully is recovered.
@Mitchell Russell It worked and I now got access to my account again. Im so happy!
Thank you so much, you really help me out !
@Louis Jaxtyn No problem :D
What a phenomenal interview. Thanks for hosting and posting this marvel
Really good episode!
Thumbs up! Keep churning! 😀
Good discussion 👌
Great content as usual. Any advice for an incoming Intl. student (finance) in Canada? My first goal is CFA I.
What's up with the doubling of Cameron's audio?
What is your camera set-up? Looks solid
Brilliant woman and brilliant guest. Thanks. Factors tilting (a lot in the moment) for me ! Shall live and see.
Great academic discussion. However like a lot of academic exercises it seems a bit pointless. What's the take home for a real investor? It would have been better had you provided a practical solution to the problem (if there is a problem?). You could have simply asked the good professor where she invests her own money. Does knowing the things she does help her take any significantly interesting investment decisions? Otherwise I don't see the point of this - atleast not yet.
Yeah, the first section about not being satisfied to treat the s&p500 as a benchmark felt a bit like nickpicking to me. Sure, 500 rather than 600 is an arbitrary cutoff, but it's not going to make any meaningful difference to the number.
What is the definition of a “high net worth investor”? Is it a a hundred thousand, a million, or a higher dollar amount? It would be interesting to see what the crypto investor is thinking and how they are behaving in the recent surge and correction. It seems many crypto investors are recently “high net worth”.
(Almost) everybody is faking confidence. Cut the almost.
We ought to behave as if we have confidence. Act confidence but acknowledge uncertainty
19:08
Sometimes academia just overcomplicates a very simple concept. I think this is one of them.
#1 :)
Dear GOD Ben is such a handsome man.
Put it back in your pants dude
43:33 Too much listening to Dave Ramsey tout “growth stock mutual funds!!”
Outdated Academia advice from someone with barely any real world trading/investing/ capital markets/M&A experience. The world has changed (see Gamestop/Bitcoin, Tesla in the S&P). How about interview successful young people in the trenches in M&A/Finance/stocks/ crypto that have created generational wealth