Dan Draper, Chief Executive Officer of S&P Dow Jones Indices, recently underscored the advantages of index investing, particularly for long-term, buy-and-hold investors. In his remarks, Draper pointed out that the performance metrics of active investing often fall short when compared to passive index-based strategies.
According to Draper, index investing offers a consistent, low-cost alternative to active fund management and tends to outperform actively managed portfolios over time. He noted that empirical data does not favor active strategies in the long run, especially for investors aiming to build wealth through long-term holdings.
“From a statistical standpoint, the numbers just don’t hold up very well,” Draper stated, referring to the historical returns generated by actively managed funds. This aligns with broader industry research indicating that most active fund managers fail to outperform their benchmarks over extended periods.
Draper’s comments come amid a growing trend of investors shifting their portfolios toward low-cost index funds and exchange-traded funds (ETFs), a move driven by a combination of underperformance in active funds and increasing accessibility to passive investing options.
As the head of one of the world’s leading index providers, Draper’s insights reinforce the appeal of index investing as a foundational strategy for individuals focused on long-term financial goals. His remarks serve as a reminder for investors to consider the importance of cost, performance, and consistency when choosing investment vehicles.
Source: https:// – Courtesy of the original publisher.
