HI,
the CFA book explains that for a market orientad investor, the fees involved to achieve market-like returns are relatively high and thus indexing or enhanced indexing may be a more cost-effective alternative.
Why is that the case? I thought a market oriented style is per definintion a passive investing style.
Thanks
market-oriented is a style, which is neither value nor growth.
it’s not necessarily equal to a market/index because it’s possible that a market/index has bias towards either growth or value stocks.
the confusion is simply because of poor choice of terminology.
Thank you!
Also the substyles of market oriented are quite subtle, i.e. value tilt, growth tilt, growth at a reasonable price, style rotation etc. The higher fees associated with this strategy might not be worth it relative to its active return potential. Moderate tilts can be done via enhanced indexing at a lower cost.