Rick Ferri, CFA on picking index funds

Rick Ferri, CFA, returns, discussing how to select the right index funds, the difference between investing philosophy and investing strategy,  and answering audience questions on rules of thumb, managing portfolio risk in retirement, high-fee funds masquerading as low-cost index funds,  factor investing, and active management style drift.

Transcript

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Jon Luskin, CFP® (00:11):

Thank you for joining us, everyone, for our third Bogleheads® Live. My name is Jon Luskin, and I’m the host for today. My co-host for today is Rick Ferri, for who Bogleheads®, needs no introduction. Rick publishes and speaks on investing and is the host of the Bogleheads® On Investing podcast.

Jon Luskin, CFP® (00:29):

Today, we’ll be discussing fund selection, with Rick having written the book on index funds titled, All About Index Funds. For today, I’ll be switching between asking Rick questions that I got beforehand across the various online Bogleheads® communities, and getting questions from our live audience here today.

Jon Luskin, CFP® (00:45):

But before that, let’s start by talking about the Bogleheads®, a community of investors who believe in keeping it simple, following a small number of tried-and-true principles. You can learn more at the John C. Bogle Center for Financial Literacy at boglecenter.net. And after three long years, the Bogleheads® Conference is back. Mark your calendar for October 12th through 14th. More details will be announced soon.

Jon Luskin, CFP® (01:09):

And mark your calendars for future episodes of Bogleheads® Live. Next Thursday, April 7th at 5:30 PM Eastern Time: Larry Swedroe will be our guest discussing his new book on Sustainable Investing. The following on Thursday, April 14th, 4:30 PM Eastern Time, Christine Benz will be joining us discussing asset correlation and sustainable distribution rates.

Jon Luskin, CFP® (01:30):

On Thursday, April 21st, a week after, Avantis Investors’ Sunil Wahal will be discussing mutual fund costs. And then the week after that, Thursday, April 28th at 4:00 PM Eastern Time, Eric Balchunas will be discussing his new book, The Bogle Effect: How John Bogle and Vanguard Turned Wall Street Inside Out and Saved Investors Trillions.

Jon Luskin, CFP® (01:52):

Before we get started on today’s show, a disclaimer. This is for informational and entertainment purposes only, and should not be relied upon as a basis for investment, tax, or other financial planning decisions. Also, this session is being recorded with an edited version later being available for download on Bogleheads®.

Jon Luskin, CFP® (02:11):

Now, let’s start our Q&A with Rick Ferri on fund selection. For my first question from username GoStraightForward on Twitter asks, “What do you look for in a fund?”

Rick Ferri, CFA (02:23):

Well, that’s a good place to start since this is an index fund selection or a fund selection talk. Now, thank you, Jon, for doing this. This is my last week and then I’m done, and other people will come on and that’s great. We’ll just continue to expand this. But today, we’re talking about individual fund selection. Last week, we talked about asset allocation, and that was recorded so you could listen to that.

Rick Ferri, CFA (02:45):

Okay, how do I do it? Well, I’m a big index fund believer. I converted to index funds back almost 25 years ago. And back then, there were just not a lot of index funds available. I think there were two ETFs that were available, and maybe there was 20 different other index funds on the market, and that was it. But what do I look for? Well, I first start with the index.

Rick Ferri, CFA (03:11):

You have to first understand what’s in the index. How is the index created? First of all, what was the index originally created for? What was the purpose? And most of the index funds that I use are following an index that was created as a benchmark, or as an economic indicator. In other words, like the S&P 500 or a total stock market, or a total international, or a total bond market. These were originally created as benchmarks for measuring the performance of active managers. Or, they were economic indicators.

Rick Ferri, CFA (03:50):

They only became the basis for investments later on, when they became index funds later on. But that wasn’t the original reason for creating these. I look under the hood and say, “what is inside of this index?” Let’s say, I’m looking for a US stock market index fund. I first have to understand all the different US stock market indexes out there, and there are many.

Rick Ferri, CFA (04:18):

In fact, I looked before I got on the call today at just some familiar names as far as the total stock market index funds that are available out there. There’s the Fidelity Total Stock Market Index Fund. There’s the Fidelity Zero Total Stock Market Index Fund. There’s the Vanguard Total Stock Market Index Fund. There’s the iShares Total Stock Market ETF. There’s the Schwab Broad Market Index Fund.

Rick Ferri, CFA (04:47):

Okay, I just named – I don’t know – five or six different, what sounded like all the same fund. But, they’re not. Every one of them is different. Why are they different? They’re different because the underlying index for each one of those things, each one of the funds that I announced, is different.

Rick Ferri, CFA (05:03):

For example, the index for the Fidelity Total Stock Market Index Fund. This is FSKAX. This is the one they charge for. The index for that is the Dow Jones Total Stock Market Index, which holds maybe 4,200 stocks (roughly).

Rick Ferri, CFA (05:27):

Now, Fidelity also has the Fidelity Zero Total Stock Market Index Fund. But, it’s not a total stock market index fund because the index that that fund follows is not the total stock market. It follows a different index. It follows the Fidelity Total Stock Market Index.

Rick Ferri, CFA (05:47):

And what’s the difference between the Fidelity Total Stock Market Index and the Dow Jones Total Stock Market Index? Well, the Fidelity Total Stock Market Index only has about 2,672 stocks, which is about 1,400 fewer stocks than their other total stock market index file. So which one is the total stock market?

Rick Ferri, CFA (06:12):

It’s not the Fidelity Zero Fund; that fund is not following a total stock market. It’s close, granted. When you look at the performance of the Fidelity Zero Fund, which has 1,400 fewer microcap stocks in it, you see that the performance of that fund is slightly different. That’s because it’s following a slightly different index.

Rick Ferri, CFA (06:46):

I want the most complete total stock market index fund that I can find, the one that has the most stocks in it. There’s three out there: There’s the Vanguard Total Stock Market Index Fund, which follows the CRSP Total Stock Market. Now, the CRSP is the Center for Research in Security Prices. That holds roughly 4,080 stocks.

Rick Ferri, CFA (07:17):

And then there’s the S&P Total Stock Market Index Fund, which holds about the same amount of stocks in it. And there’s a Dow Jones Total Stock Market Index Fund. Now, Dow Jones and S&P merged. But before they merged, each one of them had their own separate total stock market index. So one of the indices is the Dow Jones Total Stock Market Index, which is what the Fidelity Total Stock Market Index, the one you pay for, the FSKAX. That’s the index that they follow, that Dow Jones Index. The iShares total market index fund (ITOT) follows the S&P Total Stock Market.

Rick Ferri, CFA (08:00):

Now they’re almost virtually identical. I first have to understand the underlying indices. There are things out there that have begun calling themselves total stock market, but are not.

Rick Ferri, CFA (08:26):

Now, I think Schwab does it the right way. They don’t call their fund a total stock market index fund. They call it a broad market index fund, which is a better term. That’s because Schwab only owns 2,500 stocks. The index that they followed is the Dow Jones Broad Market Index. The broad market index has about 2,500 stocks. Total market index has 4,000 stocks.

Rick Ferri, CFA (08:55):

The Fidelity Zero Fund should be titled the Fidelity Broad Market Index Fund. It would be more appropriate than the total market. I know we’re talking about just a few basis points here or there, but to me, it makes a difference. Because if I’m looking for a total stock market index fund, I want to first understand all the different indices. And so I can pick the funds that actually follow those indices. 

Rick Ferri, CFA (09:25):

My list is the Vanguard Total Stock Market Index Fund or ETF, or the Fidelity Total Stock Market Index Fund. They don’t have an ETF. Fidelity doesn’t have an ETF that follows the total stock market. They have a mutual fund. And then there’s the iShares Total Stock (ITOT), an ETF. There’s two mutual funds and two ETFs. Vanguard has it both ways: they have a mutual fund and an ETF.

Rick Ferri, CFA (09:51):

In my All About Index Funds book, this is the study that I did. I did it for every single indice. The US stock market, the international stock market, the bond market. One can understand the underlying indices first. Then, find those funds (if they’re available) that follow the indice that is the broadest. The next step is availability: what’s out there? 

Rick Ferri, CFA (10:24):

What funds or ETFs are available that follow that index? And then who is the fund sponsor? Is it a big company, like a Fidelity, or a Vanguard or a Schwab? I’d rather have a big company name so that I have billions of dollars in the fund. That ensures liquidity. I want to see a larger fund. (I wouldn’t invest in any fund that has less than a $100 million in it.) 

Rick Ferri, CFA (10:55):

What’s the underlying fee of the fund? There are some that are so close, like the Fidelity fund is 0.15 basis points. The Vanguard fund is 0.03 basis points. The iShares is 0.03. Those are all within a one-and-a-half basis points. So, that difference is small. But if one of them was 30 basis points? I wouldn’t go there. The fee is important.

Rick Ferri, CFA (11:25):

And then whether it’s a fund or it’s an ETF is important as well. In a taxable portfolio, I would want to use ETFs. If I’m going to use a mutual fund and a taxable portfolio, there could be a distribution from that mutual fund at the end of the year. That would require paying taxes on that.

Rick Ferri, CFA (11:46):

I would rather choose an ETF for a taxable account. It doesn’t make any difference in a tax-deferred account, tax-advantaged account, tax-free account. It does make a difference in a taxable account. I used that methodology for the All About Index Funds book 20 years ago. I updated it 15 years ago, I haven’t updated it since. Nothing’s changed. This is how I select the funds to use or recommend for the client’s portfolios.

Jon Luskin, CFP® (12:13):

That’s fantastic. Rick, thank you for sharing all that. That’s fascinating: a broad market fund isn’t a total market fund, meaning missing out on more than a thousand different microcap companies. Because they are so small, it makes only a small difference in the fund’s investment return. 

Jon Luskin, CFP® (12:39):

Liquidity is an essential consideration in selecting a fund. You could pay a bigger bid-ask spread if you’re not cautious about that. That is a fee when investing. As Bogleheads®, we want to keep that fee low. So it’s good to have those big-name funds to keep those bid-ask spreads small.

Rick Ferri, CFA (12:51):

I looked at the 2021 performance. In 2021, the big stocks outperformed midcap, and outperformed small cap. So the S&P last year did 28 and a half percent, almost 28.66. Therefore, the broad market index funds outperformed the total stock market index fund.

Rick Ferri, CFA (13:22):

I happened to be listening to somebody talk, and they were talking about how they loved the Fidelity Zero Fund; how the performance was so good. The Fidelity Zero Total Stock Market fund in 2021 did 26.01, a little over 26%. The Vanguard Total Stock Market Fund did 25.71. So you could say, “wow, this Fidelity fund outperformed the Vanguard Total Stock Market Fund by 30 basis points in 2021.” And if you thought it was the same index, you would say, these people at Fidelity are rocket scientists. 

Rick Ferri, CFA (14:08):

However, the Fidelity Zero Fund follows a different index, which only digs down to the top 2,500. The Fidelity Zero Fund had bigger average market capitalization. Therefore, in a year when large cap stocks outperform small cap and midcap, the Fidelity total market index would have outperformed. And that’s exactly what happened.

Rick Ferri, CFA (14:47):

So if you’re going to look at these things from a performance standpoint and say, “well, I’m going to pick my total stock market index fund based on performance,” you’re going to hone in on the Fidelity Zero. 

Rick Ferri, CFA (15:07):

You can say, “gee, that Vanguard fund that’s not really any good, I mean, look, it really doesn’t even perform as well as that Schwab fund or the Fidelity fund.” Well, the Vanguard fund does perform fine. It’s just that it’s a different index. Understanding how the underlying indexes work and what’s in them will tell you a lot.

Rick Ferri, CFA (15:25):

What we were seeing in the performance last year is what I would’ve expected. Those two funds outperformed because they weren’t fully replicating the total market. They weren’t a completed index. They were missing the bottom 1,500 stocks.

Jon Luskin, CFP® (15:40):

That is fascinating. If we would see a period in the future where small cap, microcap did better, then holding that total market fund would do better than a broad market fund.

Rick Ferri, CFA (15:52):

That’s exactly right. 

Jon Luskin, CFP® (15:54):

That’s super neat. 

Rick Ferri, CFA (15:56):

Look at SPY, which is an S&P 500 index fund; it tracks the S&P 500, and it’s a unit trust. So it’s full replication. It replicates that S&P 500 to the letter. It has to, because it’s a unit investment trust. Then, consider something like VOO, which is the Vanguard S&P 500 Fund or ETF. SPY underperformed VOO. Why did it do that?

Rick Ferri, CFA (16:31):

Well, you have to understand how the structure of a unit investment trust works versus the structure of an ETF. In a unit investment trust, such as SPY, the dividends do not get reinvested. The dividends go into a separate escrow account, and they’re held there until the end of the quarter. Later, dividends are distributed out.

Rick Ferri, CFA (16:52):

As soon as the stocks pay the dividends In a mutual fund or ETF, dividends are automatically get reinvested. Therefore, in a bull market – like last year, where the S&P 500 went up 26% – automatically reinvesting dividends causes the mutual fund or the ETF to outperform SPY. And in a down market, SPY will outperform VOO because the cash from the dividends are going into an escrow account, not getting reinvested. Understanding how the structure of the fund works is also important.

Jon Luskin, CFP® (17:31):

That’s so fascinating, those little things. If you’re not a super investing nerd, it wouldn’t have even occurred to you to consider.

Rick Ferri, CFA (17:39):

It has to do with the index. It has to do with the structure; it has to do with the fee.

Jon Luskin, CFP® (17:50):

Gosh, that’s so interesting. Thank you for sharing that, Rick. Let’s turn it over to an audience question. I see David has requested to be a speaker, so I’m going to add him as a speaker, and he’ll be able to ask his question about fund selection.

David (18:06):

I just want to say first, thanks for taking my call. And Rick, I’ve followed your work over the years. I truly appreciate the works you’ve done and your commitment to this field. So my question is basically, I’ve struggled over the years, communicating the idea of indexing versus passive investing, right? 

But I go back to the kind of the textbook definition of the market portfolio that was. You want to try to efficiently replicate the market portfolio. And my observation over the years is, that’s been problematic via index funds.

David (19:02):

The S&P was not really a true market portfolio. Then you got the extended market, you bolted those together, you got a market portfolio. Then you got the total market portfolio, and now you have global portfolios. So if you believe in the original idea of trying to replicate a market portfolio efficiently cost-effectively. Would you not argue that most index funds are not passive investment vehicles?

David (19:39):

This whole idea of personal indexing or factor investing is potentially dangerous to the individual investor. They may believe they’re getting so-called passive investing via indexes.

Rick Ferri, CFA (20:23):

Indexing has gone from evolution to pollution, right? I call it SPindexing, special purpose indexing. Indexing became so popular that all of a sudden. Everybody realized money was going to flow into the indexing world. So, everything that used to be active became an index.

Rick Ferri, CFA (20:45):

Rob Arnott from Research Affiliates called his active management “fundamental indexing.” It was very clever marketing. They’re doing value factor type fund selection, and factor weighting. Since beta is the market, they called it smart beta.

Rick Ferri, CFA (21:18):

These are all meant to infer that what we’re doing is a better form of indexing. Jack Bogle struggled with this in his last few years. Bogle wanted everybody to start calling it traditional indexing. He tried to coin that phrase. There’s all that other stuff, which I call SPindexing. And then there’s traditional indexing. You have to differentiate the two. It’s difficult when you’re talking with investors who don’t understand, because they hear the marketing spin. (That’s why I call it Spindexing.)

Rick Ferri, CFA (21:57):

They think that’s a better mouse trap. Rob Arnott had people going for a while. Then value stocks fell off a cliff. And that was the end of that. Yet, he really had people going for a while, that what he was doing was indexing. However, it had nothing to do with indexing.

Rick Ferri, CFA (22:15):

Yes, it was a mechanical way of doing things. There was a formula for picking stocks, then another formula for weighting stocks, and then another formula for rebalancing and reconstitution of the index that he was calling an index. But, it was not an index.

Rick Ferri, CFA (22:33):

However, the Securities and Exchange Commission in 2004 allowed PowerShares to launch quantitative, actively-managed funds. They were the first PowerShares’ funds, and they followed these things called Intellidex Indexes. They asked the SEC if they could launch ETFs based on these Intellidex Indexing, and could they call it indexing, and could they call it passive? And what the SEC said was, “Well, as long as you’re following an index, then the fund can call itself a passive index fund.”

Rick Ferri, CFA (23:14):

So that’s what they started saying, “we are the new type of passive index fund out there.” And as soon as that happened, the whole dam broke. Everybody started launching all of this active management stuff, and calling it an index. 

Rick Ferri, CFA (23:41):

The SEC would say, as long as you had a systematic way of choosing stocks and a systematic way of weighting those stocks in a portfolio, and it was written out in some sort of a formula, then you could call it whatever it is. It could be, “we’re going to create an index of CEOs that are less than 5’8″, and are left-handed, and live west of the Mississippi index.”

Rick Ferri, CFA (24:07):

It didn’t make any difference what it was. It was an index. And if you then launched an ETF or a mutual fund against that index, to benchmark that index, then you were a passive index fund. It was terrible. And this is what we have to battle against every day.

Rick Ferri, CFA (24:34):

The more and more of that stuff that comes out, the more and more we have to talk about total stock market US, total international, total world fund, total bond fund. We have to talk about being basic, a few good basic funds, over and over. The truth has to be repeated over and over again, because lies are constantly being told. As Bogleheads®, it’s our job to do that. And that’s what I do. I’ve been doing it for 25 years, and I don’t know how long I’ll be doing it for. My wife says I’ll be doing it till I’m dead. But I don’t know, maybe beyond the grave like Jack Bogle.

Jon Luskin, CFP® (25:11):

That’s great. Thank you, Rick, so much. That is a great segue into a related question from Sycamore, a user on the Bogleheads® forum, who writes, “Some people speak on Bogleheads® about titling. What is factor tilting?” So Rick, how does one evaluate factor funds?

Rick Ferri, CFA (25:32):

Let’s say that you’ve done your total stock market, and you’ve done your total international. You’ve got the idea that I just want to be as broad as possible, at low cost. I want to represent the US market, the international market, the world market.

Rick Ferri, CFA (25:51):

But, I also want to have some icing on the cake. I want to do things where I might get a better rate of return. And I’ve studied my Fama–French three-factor model, and I’ve learned that value stocks tend to outperform growth stocks, or they had outperformed growth stocks over the long term. Small-cap stocks had outperformed large-cap stocks over the long term; profitable stocks did outperform over the long term.

Rick Ferri, CFA (26:27):

There are different ways you could do value investing. They call it the factor zoo. You could do value, momentum, quality investing. 

Rick Ferri, CFA (27:03):

But there’s price-to-earnings, price-to-cash flow, price-to-revenue, return on equity, enterprise value. Then there are multifactor ways of figuring out how to do value. And when you look at all these things, they all have the same flavor to them, but they all act a little bit differently. And then you’ve got size, large-cap, midcap, small-cap.

Rick Ferri, CFA (27:29):

Well, where are your cuts? Let’s say your S&P, where does S&P make their cut on size between the S&P say 500 large-cap, S&P midcap, S&P small-cap. 

Rick Ferri, CFA (27:42):

Morningstar has their cuts between large-cap, midcap, and small cap. Then you’ve got other index providers, Wilshire, MSCI. Where do you make the cuts? From the size perspective, everybody makes their cuts almost in the same place. So Russell Small Cap will perform pretty much like S&P Dow Jones type small-cap, CRSP type small-cap.

Rick Ferri, CFA (28:10):

They’re going to perform fairly similarly. It’s the same for mid-cap. The cuts that all these index providers make for size are fairly close. But, when it comes to value, it’s all over the place.

Rick Ferri, CFA (28:25):

Value is in the eyes of the beholder. You have to know all these different value strategies, and you have to make a determination. Am I going to use a multifactor strategy, which brings all of these things together? This is complexity, right? This is way beyond total stock market. Now, this is getting really into the weeds of complexity.

Rick Ferri, CFA (28:49):

Once you decide to do some factor investing, how do you go about selecting funds? I think a multifactor approach works best. And I don’t recommend any more than 25% of your equity going into this.

Rick Ferri, CFA (29:14):

A multifactor approach means value plus quality, plus momentum, plus size. Those four things, which tend to be the most prevalent, rolled up in just one fund. So it ends up being a small-cap value fund that has quality stocks and momentum. And the momentum is the final screen where if a stock is going down, they don’t buy it until it flattens out. That multifactor approach is what I’m going to look for.

Rick Ferri, CFA (29:53):

I want the fund that has the most of these factors. I don’t want beta; I’m not looking for a market return. I want this factor juice; I want a very concentrated, small-cap value factor fund, the most concentrated that I can get. 

Rick Ferri, CFA (30:23):

I look at what’s S&P using for their index? What’s DFA using? (Even though they don’t have indexes, how are they doing it?) What have all these other small-cap value index providers used that gives me this very deep concentration that I’m looking for? 

Rick Ferri, CFA (30:46):

Then I look at the years when small-cap value did poorly. So large-cap growth did very well, or small-cap value did very poorly. And I’m looking for the fund that did the poorest of the poor. I want the absolute dog. I want the dog because that means that fund has what I’m looking for.

Rick Ferri, CFA (31:14):

I’m looking for those things that did horrible when this whole sector of the market did terrible. I want the worst one. But, I also want it in a package where it’s low fee. I don’t want to be paying a 100 basis points. It’s got to be less than 50, and better off if it’s less than say 30. 

Rick Ferri, CFA (31:38):

I want it in an ETF because I don’t want to get capital gain distributions if I’m going to do this in a taxable account. There are three funds I tell people about. There oldest is the Invesco S&P SmallCap 600 Pure Value. And I’m not going to get into how they index is created and all that, but it’s a very pure, concentrated, small-cap value fund.

Rick Ferri, CFA (32:10):

It was really the first one available in the ETF form. It’s the one I bought whenever it was available. So, I actually own that fund. The next one that came along was the Avantis Small Cap Value Fund. ( I had Eduardo Repetto on my podcast talking about that fund last month). That fund is only 25 basis points.

Rick Ferri, CFA (32:33):

And the last one that just came out last year is the DFA ETF. It’s DFA Targeted Value ETF (DFAT). So you’ve got RZV, which is the Invesco fund. AVUV, which is the Avantis fund, and DFAT, which is the DFA. Those are the three deep concentrated, low-cost, small-cap value funds that I use when I make a recommendation. And on the international side, I also recommend the Avantis fund; it’s a small-cap international value. So that’s what I’m using now, or at least I’d recommend it.

Jon Luskin, CFP® (33:21):

So just with respect to our plain vanilla, very simple part of our portfolio, we want to manage costs, and naturally we want to manage tax efficiency as well. 

Speaker 4 (33:46):

Jon, thanks for hosting this space. Rick, I really appreciate your insight here. The question that I have is, do you have research on, if any, of the best times to be invested in index, and the best times to be invested in say a more active approach?

Speaker 4 (34:08):

Are there times across the market where active investing is advantageous for a short period or in a window, and then you can roll back into a passive index model? I would love to hear your thoughts on that. Thanks.

Rick Ferri, CFA (34:26):

Well, I’ve never been able to do that, but I appreciate what you’re saying. And I’ve thought about it for many years. Is there an opportunity to go active and then come back and go passive? Active managers are messy. Indexes are pure. And what do I mean by that? This is something called the Dunn’s Law. And maybe the Bogleheads® who are listening on this will know who I’m talking about. 

Rick Ferri, CFA (34:58):

And what he realized is that active managers don’t stay in their style box. They drift. 

Rick Ferri, CFA (35:27):

So let’s say small-cap value did very poor; large-cap growth did very well. That’s where you’re going to find the active managers that outperformed those index funds. And why is that? It’s because the active managers don’t stay in their style box. They drift. They might own 50% small-cap value, but maybe they own some midcap growth. Maybe they own some large-cap core.

Rick Ferri, CFA (36:03):

Active management can go anywhere they want. They’ll let their portfolio drift to a different part of the style box. Not like an index. If that’s the case, if the active manager drifts and their style box underperforms, it will make that manager look smart.

Rick Ferri, CFA (36:30):

Were they smart? Probably not. They just happen to be there at that particular time. But, it makes it look as though they’re outperforming. 

Rick Ferri, CFA (37:03):

If you knew which style box was going to underperform, then you probably should use active management because they’re messy in their stock selection, outperforming the index.

Rick Ferri, CFA (37:28):

If you think a portion of the market is going to outperform, then you want to buy the index because the index will outperform the managers. Is anyone going to try to do this? No. It doesn’t make any sense. Just buy the market.

Rick Ferri, CFA (37:49):

When I was in college, when I was getting my master’s degree in the 1990s, I wrote a paper on this very topic, trying to pick active managers in certain segments that I thought were going to outperform.

Rick Ferri, CFA (38:06):

It didn’t work because all the managers that I picked underperformed because they were very messy in their selection. 

Jon Luskin, CFP® (38:25):

Rick, that’s fantastic. Thanks so much for sharing that. One thing that I hear a lot as a pitch for active management is, “active management does better during down markets.” But the reason is to the exact point you just made, that’s because of a style drift. It’s an apples-to-oranges comparison. Well, folks that is all the time that we have for today. Rick, thank you for joining us-

Rick Ferri, CFA (38:48):

Thank you.

Jon Luskin, CFP® (38:48):

... once again. Pleasure to have you. And thank you for everyone else who joined us today for Bogleheads® Live. Our next Bogleheads® Live will be on Thursday, April 1st, 5:30 PM Eastern Time. We’ll be discussing sustainable investing with Larry Swedroe. The week after that, we’ll be discussing asset correlation and sustainable distribution rates with Christine Benz of Morningstar. Between now and then, you could submit your questions on sustainable investing for Larry, and other questions for Christine on the Bogleheads® forum at Bogleheads®.org and on Bogleheads® Reddit.

Jon Luskin, CFP® (39:19):

Until then, you can access that very 

• Bogleheads® forum at Bogleheads.org.
• The Bogleheads® Wiki
• Bogleheads® Reddit
• Bogleheads® Facebook
• Bogleheads® Twitter
• Bogleheads® YouTube channel
• my personal favorite: Bogleheads® local chapters. Shout out to my San Diego group. 
• Bogleheads® virtual chapters 
• Bogleheads® international chapters
• Bogleheads® conferences and
• books.

Jon Luskin, CFP® (39:37):

The John C. Bogle Center for Financial Literacy is a 501(c)(3) nonprofit organization. At boglecenter.net, your tax deductible contributions are greatly appreciated. Thank you again, everyone for showing up today, I look forward to seeing you all again next Thursday, April 1st at 5:30 PM Eastern Time, where we’ll have Larry Swedroe discussing his new book on sustainable investing. Until then, have a great week.