In his book, Unconventional Success: A Fundamental Approach to Personal Investment, Swensen recommends with all assets that investors use passive index mutual funds.

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While active investment involves an asset manager making investments with the aim of outperforming a benchmark index, passive investment requires an asset manager to replicate the benchmark index by incorporating the constituent assets in similar proportions (weights) and thereby matching the returns of the index.

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Financial services firms that rely on brokers and advisors face a threat from online channels which are accumulating assets faster than full service firms, partly because of the growing popularity of passive investments such as index funds and ETFs, he added.

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