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Some Indexers Grouse About 'Smart Beta' Approaches
'Joel Dickson, a senior investment strategist in Vanguard's Investment Strategy Group, said strategies that involve overweighting particular factors look a lot like active management "cloaked in index Halloween costumes." '
Mr. Dickson apparently can't grasp the fact that there's nothing sacred about market-cap indexes, which 'overweight' (actually, just favor in construction) higher priced assets and larger companies, in the same manner that he accuses alternatives to market cap of 'overweighting' other factors. Once he grasps that there are a number of ways to 'index,' he'll get over his horror of alternatives to his narrow way of looking at the world.
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Mr. Dickson apparently can't grasp the fact that there's nothing sacred about market-cap indexes, which 'overweight' (actually, just favor in construction) higher priced assets and larger companies, in the same manner that he accuses alternatives to market cap of 'overweighting' other factors. Once he grasps that there are a number of ways to 'index,' he'll get over his horror of alternatives to his narrow way of looking at the world.