Index fund managers, academics, and many institutional investors have recognized the merits of passive investing for decades. However, it wasn’t until the boom of the 1990s that indexing gained popularity among even the most skeptical groups of investors. It was during this time that retail and non-US investors, historically cool to the idea of “settling” for mere market returns, jumped on the indexing band wagon, which had long been occupied by US institutional investors. As the ’90s fade we face the challenges of a new era. Market volatility has increased. A weak global economy shows little sign of a near-term turnaround. Uncertainty surrounding the duration of the current slowdown and the outcome of the war on terrorism has caused some investors to question their appetite for equities in general. (Read on …)