Part 3/9:
Six Compelling Points for Index Funds
Felix builds his case on six pivotal points, each reinforced by theory and empirical evidence:
1. Cost Efficiency
One of the most compelling attractions of index funds is their low fees. In Canada, the weighted average fee for index funds stands at a mere 0.19%, while the average cost for actively managed funds soars to about 0.85%. The crux of the argument is that higher fees often equate to lower investment returns. Research has substantiated that fees are a reliable predictor of future fund performance, with Vanguard’s founder, John Bogle, emphasizing that paying less generally yields a better financial outcome.