Four Intriguing Index Funds That Deserve Attention
Big index funds get all the press, but these lesser-known funds are still worth a look.
When most investors think about index funds, the first name that likely comes to mind is Vanguard--and for good reason. Vanguard's history is built around the index fund concept--the company bravely launched over 30 years ago the first retail index fund based on the S&P 500 Index (ironically dubbed "Bogle's folly" at the time after firm founder John Bogle). Vanguard's rock-bottom index fund fees--one of the primary advantages of passively managed funds--are also laudable.
But Vanguard's dominance over the index-investing landscape has overshadowed some worthy players. Dimensional Fund Advisors, for instance, is a much smaller shop than Vanguard, but it provides plenty of appealing index fund choices. In fact, the index options at DFA outnumber the offerings at Vanguard. And DFA offers a more exotic array of choices, such as Emerging Markets Social Core Equity (DFESX) and U.S. Sustainability Core (DFSIX), whereas Vanguard tends to stick with plain-vanilla indexes such as the S&P 500 Index and other commonly known market indexes.
Another lesser-known player that offers solid index choices is Bridgeway. This interesting, shareholder-friendly shop is smaller than DFA, but that doesn't limit its appeal. Bridgeway has 11 funds--mostly quantitatively run; two of which are index funds. Bridgeway's ability to be nimble in the micro-cap space is an advantage especially over behemoths such as Vanguard or Fidelity whose enormous size limits their ability to operate as smoothly.
Greg Brown does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
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