TY - JOUR T1 - Is Traditional Indexation Passé? <em>Vanguard Versus the Enhanced Indexers: DFA, RAFI, and WisdomTree</em> JF - The Journal of Index Investing SP - 70 LP - 81 DO - 10.3905/jii.2013.4.1.070 VL - 4 IS - 1 AU - Edward Tower AU - Chao Yang Y1 - 2013/05/31 UR - https://pm-research.com/content/4/1/70.abstract N2 - Vanguard provides low-cost capitalization-weighted mutual funds: traditional index funds. The asset allocation of DFA’s core funds is determined by fundamentals as well as market cap. RAFI’s allocation depends on four fundamental factors—dividends, cash flow, sales, and book equity value. WisdomTree’s allocation is also determined by fundamentals alone. We compare returns of these enhanced index funds with corresponding Vanguard mutual fund portfolios. Focusing on U.S. funds only, DFA had lower returns than portfolios of Vanguard funds that mimicked their style; RAFI and WisdomTree out-returned Vanguard. Two cheers for enhanced indexation and one for traditional.TOPICS: Mutual fund performance, passive strategies, portfolio theory ER -