Passive Investing Without Indexes

Most investors believe all passively managed funds within the same asset class should have the same, or at least very similar, returns. However, while all index funds and passive structured asset class funds are similar in the way that rectangles and squares are similar, they are also very different. All squares are rectangles, but not all rectangles are squares.

Similarly, while all index funds are passively managed, not all passively managed structured asset class funds attempt to replicate the returns of popular retail indexes like the S&P 500 or the Russell 2000.

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