Evolution of passive investing: from “bulk beta” to personalization
Inexpensive Market performance (beta) – BUT – Mutual fund structure relatively inefficient (costs, taxes)
Less expensive Better tax treatment – BUT – “Bulk beta,”not customizable Can’t harvest tax losses Not appropriate for all asset classes
Lower fees than active managers Rules-based, market-like returns Greater customization Tax advantages not available in ETFs
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Tax efficiency and customization
Index mutual funds
Index ETFs
Direct indexing
