Pfersching frames the evolution from active mutual funds to passive ETFs as the pro-investor revolution of the past 50 years, contrasting expensive "actively-crewed galleons" (mutual funds with 1%+ expense ratios failing to beat market returns long-term) against modern "efficient super-carriers" (ETFs with sub-0.10% costs capturing entire market returns). Five ETF superiority factors emerge: radical low costs compounding to hundreds of thousands in savings, extreme diversification delivering instant professional-grade exposure across thousands of global companies, complete transparency revealing exact holdings, intraday trading flexibility unlike mutual funds, and tax efficiency through unique structural advantages minimizing capital gains distributions. The chapter expands beyond core broad-market ETFs to specialized vehicles—sector ETFs (healthcare, renewable energy), factor/smart-beta ETFs (value, momentum, low-volatility), thematic ETFs (AI/robotics, cybersecurity, genomics), and bond ETFs—enabling institutional-grade portfolio construction through handful of holdings harnessing collective global economic growth as persistent tailwind.

Chapter 13: The Index Revolution

Warren Pfersching