Consuelo Mack And Robert Arnott: Is There A Better Mousetrap?

Consuelo Mack met with Research Affiliates Chairman and CEO Rob Arnott and the week’s Financial Thought Leader on her Wealthtrack show and sought answers to two very important questions:

• Why should we settle for just the market’s ‘average’ results provided by the index funds?
• Is the capitalization weighted method used by the index funds efficient enough?

John Bogle’s 1975 innovation of the index fund, a vehicle that made the broad market available to the common investor at a cheaper cost, initially met with indifference from investors and derision on Wall Street. However, the merits of the index fund started becoming apparent to investors around 1986, and in the decades since it has become one of the most popular avenues for investment...