Module 1 - The case for low-cost index-fund investing
Learning objectives
- Explore index investing and its rising popularity.
- Understand the benefits of the approach - such as lower costs, and more diversification and transparency and the way index investing differs to active management.
- Explore the theoretical underpinnings of index investing’s success, such as the zero-sum game theory and the impact of costs on net returns.
- Understand the rarity of persistent outperformance among active managers, and the importance of long-term timeframes for evaluating investment strategies.
- Analyse the impact of costs on the performance of active management versus index investing.
Learning outcomes
- Understand index investing and its popularity due to lower costs, diversification benefits and transparency.
- Familiarity with the zero-sum game theory and its implications for active management.
- Understand the influence of costs on investment performance and how low-cost index funds offer market exposure at minimal expenses.
- Understand how index investing differs from active management.
Unit 1: The case for low-cost index-fund investing
Reading time: 15 minutes
This article reviews the conceptual and theoretical underpinnings of index investing’s ascendancy and discusses why we expect it to continue its success and popularity.
Read the articleVideo 1: An introduction to index-fund investing
Watching time: 4 minutes
Find out what index investing is and what makes it popular with investors.
Watch the videoVideo 2: Exploring the benefits of index-fund investing
Watching time: 3 minutes
Learn about how low-cost index investing can help investors achieve their financial goals.
Watch the videoModule 1 quiz
Take the Module 1 quiz for 30 minutes of CPD.
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