FT Guide to Exchange Traded Funds and Index Funds, 2nd Edition

6

The new fundamental indexing revolution

Like all great revolutionary movements, the adherents of an indexing approach to investment have multiplied exponentially in numbers over recent years and that growth has been accompanied by an inevitable splintering into smaller groups with ever more detailed and considered doctrines. A vocal and hugely sophisticated group of analysts and fund managers has coalesced around a simple idea – that the traditional index is flawed in its design and that it needs to be rethought and linked back to a much older idea that suggests the only sensible investment idea is one that is based around the concept of good ‘value’. Fund manager Rob Davies, from Fundamental Tracker Investment Management (FT/M), based ...