Revisiting International Equity Indexing
The case for indexing overseas is stronger than first appears.
In 2013, I adjudicated a debate between an academic who supported actively managing international equities, and a practitioner who advocated indexing. (Role reversal!) After reviewing the evidence, I took the middle ground. Indexing is always a viable strategy, but, I wrote, it must be granted that the case for active management is stronger with international stocks than with U.S. companies.
Today's column updates its predecessor, incorporating subsequent market performance. Its argument is much more direct. The 2013 article, it must be confessed, meandered rather badly. This column will take the straightest of lines.