{"product_id":"the-fundamental-index-isbn-9780470277843","title":"The Fundamental Index","description":"2008 American Publishers Awards for Professional and Scholarly Excellence (The PROSE Awards) Finalist\/Honorable mention, Business, Finance \u0026amp; Management.  \u003cp\u003e\u003ci\u003eThe Fundamental Index\u003c\/i\u003e examines a new approach to indexing that can overcome the structural return drag created by traditional capitalization-based indexing strategies, and in so doing, enhance the performance of your portfolio. Throughout this book, Robert Arnott and his colleagues outline this breakthrough strategy and explain how it can be used to improve investment returns, typically at lower risk and lower cost than most conventional investments.\u003c\/p\u003e  Foreword.  \u003cp\u003ePreface.\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 1. Efficient Indexing for an Inefficient Market.\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eEvidence of Market Efficiency.\u003c\/p\u003e \u003cp\u003eThe Case for Indexing.\u003c\/p\u003e \u003cp\u003eEvidence of Market Inefficiency.\u003c\/p\u003e \u003cp\u003eConclusion.\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 2. Origins of the Fundamental Index Concept.\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Origins of Research Affiliates Fundamental Index (RAFI).\u003c\/p\u003e \u003cp\u003eA Series of \u003ci\u003eAha!\u003c\/i\u003e Moments\u003c\/p\u003e \u003cp\u003eResearch Affiliates Fundamental Index.\u003c\/p\u003e \u003cp\u003eFundamental Index Performance.\u003c\/p\u003e \u003cp\u003eConcluding Thoughts: A Better Way to Invest.\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 3. Investors Greatest Errors.\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eNegative Alpha.\u003c\/p\u003e \u003cp\u003ePracticing What We Preach.\u003c\/p\u003e \u003cp\u003eConclusion.\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 4. The Virtues of Index Funds.\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Appeal of Equity Investing.\u003c\/p\u003e \u003cp\u003eEquity Investing Choices.\u003c\/p\u003e \u003cp\u003eThe One Guarantee in Investments—Costs Matter.\u003c\/p\u003e \u003cp\u003eIndex Fund Advantages.\u003c\/p\u003e \u003cp\u003eAvoiding the Performance Game.\u003c\/p\u003e \u003cp\u003eConcluding Point.\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 5. The Index Fund's Achilles Heel.\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eMarket Efficiency: Two Interpretations.\u003c\/p\u003e \u003cp\u003eConstructing a Well-Functioning Index.\u003c\/p\u003e \u003cp\u003eThe Achilles Heel of Cap-Weighting.\u003c\/p\u003e \u003cp\u003eThe Problems with Equal Weighting.\u003c\/p\u003e \u003cp\u003eConcluding Thoughts.\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 6. A Fundamental(ly) Better Index.\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBuilding the Fundamental Index.\u003c\/p\u003e \u003cp\u003eAdjustments for non-dividend-paying companies.\u003c\/p\u003e \u003cp\u003eWhy Multiple Measures of Company Size?\u003c\/p\u003e \u003cp\u003eAdvantages of a Composite Measure.\u003c\/p\u003e \u003cp\u003eAn Index of the Broad Economy.\u003c\/p\u003e \u003cp\u003eCapacity and Liquidity.\u003c\/p\u003e \u003cp\u003eReconstituting the Fundamental Index: Keeping Turnover Low.\u003c\/p\u003e \u003cp\u003eConcluding Comments.\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 7. Fundamental Index Performance in U.S. Stocks.\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eRAFI US Large Company Performance.\u003c\/p\u003e \u003cp\u003eDigging Deeper across Market Cycles.\u003c\/p\u003e \u003cp\u003eDigging Deeper into Different Time Periods.\u003c\/p\u003e \u003cp\u003eAn Equal Comparison: Fundamental Index vs. Equal Weighting.\u003c\/p\u003e \u003cp\u003eOut-of-Sample Results: Small Companies.\u003c\/p\u003e \u003cp\u003eUsing the Fundamental Index with Style: Growth and Value Applications.\u003c\/p\u003e \u003cp\u003eNarrowing the Focus: NASDAQ.\u003c\/p\u003e \u003cp\u003eNarrowing the Focus: REITs.\u003c\/p\u003e \u003cp\u003eNarrowing the Focus: Sector Performance.\u003c\/p\u003e \u003cp\u003eExtending the Analysis Back in Time.\u003c\/p\u003e \u003cp\u003eConclusion.\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 8. Beyond Borders: Fundamental Index Performance in Global Markets.\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eFundamental Index Performance in Global Markets.\u003c\/p\u003e \u003cp\u003eMulticountry Portfolios.\u003c\/p\u003e \u003cp\u003eEmerging Markets.\u003c\/p\u003e \u003cp\u003eConsistency Counts.\u003c\/p\u003e \u003cp\u003eConcluding Comments: Lessons Learned From the Global Markets.\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 9. Has Theory Led the Profession Astray?\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWill the \u003ci\u003eReal\u003c\/i\u003e Active Strategy Please Step Forward?\u003c\/p\u003e \u003cp\u003eThe Origins of Cap Weighting.\u003c\/p\u003e \u003cp\u003eApparent Validation of Cap Weighting by Theory.\u003c\/p\u003e \u003cp\u003eForty Years Later: Empirical Results of the CAPM.\u003c\/p\u003e \u003cp\u003eOckham's Razor Applied.\u003c\/p\u003e \u003cp\u003eConcluding Comments: Theory and the Profession.\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter10. The Basic Criticism: Our Style and Size Tilt.\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eMerely a Value Tilt.\u003c\/p\u003e \u003cp\u003eSmall-Cap Bias.\u003c\/p\u003e \u003cp\u003eFama and French Factors.\u003c\/p\u003e \u003cp\u003eSome Big Surprises in Small Companies.\u003c\/p\u003e \u003cp\u003eConclusion.\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 11. Other Common Critiques: Hits and Misses.\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eMining the Data?\u003c\/p\u003e \u003cp\u003eCosts.\u003c\/p\u003e \u003cp\u003eIs It an Index?\u003c\/p\u003e \u003cp\u003eDo We Know Which Stocks Are Overvalued?\u003c\/p\u003e \u003cp\u003eHow Long Can It Last?\u003c\/p\u003e \u003cp\u003eConclusion.\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 12. Why Trust the Fundamental Index Concept?\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eStock Logic.\u003c\/p\u003e \u003cp\u003eThe Present vs. the Future: How Often Is Wall Street Right?\u003c\/p\u003e \u003cp\u003eWhy Does Wall Street Get It Wrong?\u003c\/p\u003e \u003cp\u003eDynamic Style and Size Exposures: When Do We Want Value and Small Cap?\u003c\/p\u003e \u003cp\u003eShow Me the Numbers.\u003c\/p\u003e \u003cp\u003eFundamental Index Strategy vs. the Crystal Ball.\u003c\/p\u003e \u003cp\u003eDoes the Fundamental Index Concept work in Bonds?\u003c\/p\u003e \u003cp\u003eConclusion.\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 13. The Future for the Fundamental Index: Secular Market Considerations.\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhat Can We (Rationally) Expect from Our Investments?\u003c\/p\u003e \u003cp\u003eForecasting Bond Returns.\u003c\/p\u003e \u003cp\u003eForecasting Stock Returns.\u003c\/p\u003e \u003cp\u003eThe Fundamental Index Strategy in a Low-Return Environment.\u003c\/p\u003e \u003cp\u003eThe Outlook for Pricing Errors.\u003c\/p\u003e \u003cp\u003eCould Pricing Errors Actually Increase?\u003c\/p\u003e \u003cp\u003eConclusion.\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 14. Using the Fundamental Index.\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eAsset Allocation and the Fundamental Index Strategy.\u003c\/p\u003e \u003cp\u003eShould We Change Our Benchmark?\u003c\/p\u003e \u003cp\u003eDiversifying the Passive Allocation.\u003c\/p\u003e \u003cp\u003eDifferent Markets, Different Investors, Different Needs.\u003c\/p\u003e \u003cp\u003eConclusion.\u003c\/p\u003e \u003cp\u003eAppendix.\u003c\/p\u003e \u003cp\u003eNotes.\u003c\/p\u003e \u003cp\u003eReferences.\u003c\/p\u003e \u003cp\u003eIndex.\u003c\/p\u003e  2008 American Publishers Awards for Professional and Scholarly Excellence (The PROSE Awards) Finalist\/Honorable mention, Business, Finance \u0026amp; Management.  \u003cp\u003eIn \u003ci\u003eThe Fundamental Index\u003c\/i\u003e, the leading industry thinker, Rob Arnott and his colleagues, present a new indexing method that captures more return for equity investors. In this important new book, the authors explain how passive, market-capitalization-weighted index investing falls short and fails to serve investors by investing too much in overpriced stocks and too little in underpriced shares. In short, Arnott et al.’s innovative and straightforward strategy provides investors with a new tool for achieving excess returns in a projected low-return environment while preserving the many positive attributes of index fund investing.- \u003ci\u003eFinancial Markets and Portfolio Management\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003e\"Rob Arnott and his colleagues have, in \u003ci\u003eThe Fundamental Index,\u003c\/i\u003e produced one of the most controversial books in years in the investment world…Investment professionals would be very well advised to read it.\"- \u003ci\u003eFinancial Times\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003e\u003ci\u003e\"...one of the most controversial books in years...Investment professionals would be very well advised to read it.\"\u003c\/i\u003e (Financial Times, September 15, 2008)\u003c\/p\u003e \u003cp\u003e\u003cb\u003eROBERT D. ARNOTT\u003c\/b\u003e is a leading industry thinker and researcher who served as the editor of the \u003ci\u003eFinancial Analysts Journal\u003c\/i\u003e from 2002–2006 and who has authored over 100 articles for journals such as the \u003ci\u003eFinancial Analysts Journal,\u003c\/i\u003e the \u003ci\u003eJournal of Portfolio Management,\u003c\/i\u003e and the \u003ci\u003eHarvard Business Review.\u003c\/i\u003e Arnott serves as Chairman of Research Affiliates, LLC, a global leader in innovative investing and asset allocation strategies. Founded in 2002, Research Affiliates distributes investment products in partnerships with leading financial institutions including PIMCO, PowerShares, Charles Schwab, Nomura Asset Management, and FTSE, to name only a few. \u003c\/p\u003e \u003cp\u003e\u003cb\u003eJASON C. HSU, P\u003csmall\u003eH\u003c\/small\u003eD,\u003c\/b\u003e is Managing Director, responsible for Research and Investment Management, at Research Affiliates, LLC. He is also a Professor in Finance at the Anderson School of Business at UCLA.  \u003c\/p\u003e\u003cp\u003e\u003cb\u003eJOHN M. WEST\u003c\/b\u003e is Associate Director and Product Specialist at Research Affiliates, LLC. Previously, he was vice president and senior consultant at Wurts \u0026amp; Associates, where he managed the firm’s overall research effort.  \u003c\/p\u003e\u003cp\u003eThe Fundamental Index\u003csup\u003e®\u003c\/sup\u003e approach is a straightforward concept that weights companies in an indexed portfolio by their current economic scale, rather than by the value of their shares outstanding. In effect, this method shifts the frame of reference for investing from a market-centric view of the world—weighting companies according to how large the market thinks a company will become in the future, and prepays for today—to an economy-centric view—mirroring the current look of the economy. The authors demonstrate that this puts you in a better position to capture considerable profits along the way.\u003c\/p\u003e \u003cp\u003eAuthor Rob Arnott and his colleagues at his innovative investment firm, Research Affiliates, spent several years developing the Fundamental Index methodology. In just over three years, the idea has attracted over $20 billion of investment capital from some of the largest and most sophisticated institutional investors in the world. Now, with this book, Arnott and his coauthors Jason Hsu and John West explore the nuances of this approach, its historical roots, and its many practical applications.  \u003c\/p\u003e\u003cp\u003e\u003ci\u003eThe Fundamental Index\u003c\/i\u003e examines how this new twist on indexing can overcome the structural return drag created by traditional capitalization-based indexing strategies—which systematically overweight overpriced securities and underweight underpriced securities—and in so doing, enhance the performance of your portfolio. Throughout these pages, Arnott and his colleagues outline this breakthrough strategy and explain how it can be used to improve investment returns, typically at lower risk and lower cost than most conventional investments. \u003c\/p\u003e\u003cp\u003eIn addition to discussing the powerful long-term performance of this strategy, \u003ci\u003eThe Fundamental Index\u003c\/i\u003e also addresses an array of additional advantages associated with the Fundamental Index approach. You’ll discover how it allows for more flexibility in your asset allocation decisions and learn how it can be particularly useful when dealing with inefficient market categories such as small companies and emerging markets. Best of all, you’ll see how well Fundamental Index portfolios perform when excess returns are needed most—during market and economic downturns.  \u003c\/p\u003e\u003cp\u003eIn the years ahead, the Fundamental Index approach will become an important part of the indexing community and an essential alternative for those who are disappointed with the hollow promises of active management and frustrated with the market bubbles that traditional index funds pull us into. This innovative and accessible strategy will give experienced and aspiring investors—and their advisors—a new tool to achieve better returns in a variety of markets and conditions. Pick up this book today and discover how the Fundamental Index strategy can work for you.\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47990233465061,"sku":"NP9780470277843","price":29.95,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9780470277843.jpg?v=1761787009","url":"https:\/\/k12savings.com\/products\/the-fundamental-index-isbn-9780470277843","provider":"K12savings","version":"1.0","type":"link"}