A smarter long-term investment solution

The key to the effectiveness of the index approach is long-term thinking. Instead of trying to beat the market, this approach harnesses the average market return.

The index approach lets your investments grow alongside the world’s leading companies (1,600+) rather than risking potential setbacks.
And the costs are pleasantly low.

Nine famous logos: Apple, McDonald's, Disney, Netflix, Tesla, Meta, Hilton, IBM, Microsoft, and Mastercard.

Index approach vs hand-picked stocks

The index approach means investing in the entire market at low cost, without picking individual stocks or bonds. It is an excellent way to reduce concentration risk and diversify both geographically and across sectors.

This approach delivers returns that, before fees, match the average result of global market indices. Year after year, the index approach outperforms traditional investment funds. That said, past performance does not guarantee equivalent returns in the future.

10%

In the long run, only 10% of active funds outperform their corresponding market indices

Active funds underperform, are closed or merged

Active funds outperform passive management

Data sources: fktk.lv (Latvia, 2011–2016), oecd.org (other OECD countries; latest study – 2013 data)

Many famous investors recommend the index approach

An older man wearing glasses and a suit smiles slightly against a blue background.

Warren Buffett

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An old man with glasses posing for an official photo.

William F. Sharpe

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Paul Samuelson

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In the short term, your savings rise and fall with market fluctuations

Before your retirement, the stock market will almost certainly go through several crises. A wise investor making a long-term investment prepares to stay calm during downturns. That is the only way to invest successfully in the stock market.

Statistics show that virtually no one succeeds at this in the long run

A large body of research shows that so-called active fund management not only fails to add value for investors, but actually reduces the expected return on investment. “Players” waste money on trading commissions and cannot consistently guess which stocks are “the best” over the long term.

Index-linked funds invest automatically in the entire market, without picking individual stocks or bonds

For example, INDEXO clients own a small share of more than 1,600 of the largest companies in developed countries. It is an excellent way to reduce investment concentration risk. This approach does not rely on managers’ expertise but invests in global markets and delivers returns that, before fees, match the average result of global market indices.

Traditional funds try to beat the market – to guess which stocks or bonds will be the most profitable

This is so-called active management, practised by most pension fund managers in Latvia. In the long run, this approach has not delivered good results for Pillar 2 pension savers in Latvia.

Studies show that index funds outperform traditional investment funds year after year

That is exactly why, since 2017, we have been urging the public to choose the approach that has consistently delivered better results around the world for decades – passive management and investing in index funds. This approach does not rely on managers’ expertise but invests in global markets and delivers returns that, before fees, match the average result of global market indices.

In the long run, the global economy grows, financial markets keep climbing, and your savings increase

Remember – at INDEXO, your savings are invested in more than 1,600 of the largest companies in developed countries. These are real businesses where thousands of people go to work every day to create value for the global economy. As long as these companies keep operating and growing, your savings will keep growing too. And you are betting on 1,600 horses, not just one.

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