Do Vanguard's Managed Funds Beat Its Index Funds? Looking for Prescient Stock and Style Selection Draft 1
AbstractIs John Bogle right that Vanguardís index and managed funds are comparable and by his example that investors should hold both? Each Vanguard managed fund produces the same return as the tracking basket of Vanguardís indexed funds plus a differential, a. If a, is positive the managed fund is superior to the tracking index. Managed funds that are closely tracked by their tracking basket are beaten by their baskets. Those that are not, beat them. We also find that during the period considered: aís in one period predict aís in the next period, and managers make prescient style choices.
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Bibliographic InfoPaper provided by Duke University, Department of Economics in its series Working Papers with number 07-03.
Length: 22 pages
Date of creation: 2007
Date of revision:
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-05-19 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Reinker, Kenneth S. & Tower, Edward, 2003.
"Index Fundamentalism Revisited,"
03-07, Duke University, Department of Economics.
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