The theory behind indexing: A zero-sum game

The concept of a zero-sum game starts with the understanding that at any given point in time, the holdings of all investors in a particular market aggregate to form that market. So if one investor’s dollars outperform the aggregate market over a particular time period, another investor’s dollars must underperform.

Cost impact page Indexing low cost page Trending downward page
Persistent performance page

Representative style benchmark data provided by:
Non-U.S. equity benchmarks—Global: Total International Composite Index through August 31, 2006, MSCI EAFE + Emerging Markets Index through December 15, 2010, MSCI ACWI ex USA IMI Index through June 2, 2013, FTSE Global All Cap ex US Index thereafter; Developed: MSCI World ex USA Index; Emerging markets: MSCI Emerging Markets Index.

U.S. equity benchmarks—Large blend: MSCI US Prime Market 750 Index through January 30, 2013, CRSP US Large Cap Index thereafter; Large growth: MSCI US Prime Market Growth Index through April 16, 2013, CRSP US Large Cap Growth Index thereafter; Large value: MSCI US Prime Market Value Index through April 16, 2013, CRSP US Large Cap Value Index thereafter; Mid blend: MSCI US Mid Cap 450 Index through January 30, 2013, CRSP US Mid Cap Index thereafter; Mid growth: MSCI US Mid Cap Growth Index through April 16, 2013, CRSP US Mid Cap Growth Index thereafter; Mid value: MSCI US Mid Cap Value Index through April 16, 2013, CRSP US Mid Cap Value Index thereafter; Small blend: MSCI US Small Cap 1750 Index through January 30, 2013, CRSP US Small Cap Index thereafter; Small growth: MSCI US Small Cap Growth Index through April 16, 2013, CRSP US Small Cap Growth Index thereafter; Small value: MSCI US Small Cap Value Index through April 16, 2013, CRSP US Small Cap Value Index thereafter.

U.S. bond benchmarks—Barclays indexes: U.S. 1–5 Year Government Bond Index, U.S. 1–5 Year Corporate Bond Index, U.S. Intermediate Government Bond Index, U.S. Intermediate Corporate Bond Index, U.S. GNMA Bond Index, U.S. Corporate High Yield Bond Index.

Notes:
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There may be other material differences between products that must be considered prior to investing. Past performance is no guarantee of future returns. The performance of an index is not an exact representation of any particular investment, as you cannot invest directly in an index.

All investing is subject to risk, including the possible loss of the money you invest.