Jeremy Siegel on Fundamental Indexing

Barry Ritholtz is a Bloomberg View columnist. He founded Ritholtz Wealth Management and was chief executive and director of equity research at FusionIQ, a quantitative research firm. He blogs at the Big Picture and is the author of “Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy.”
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This week on our Masters in Business interview, we speak with University of Pennsylvania Wharton School professor Jeremy Siegel, sometimes referred to as the “Wizard of Wharton.”

Siegel also is a senior adviser to exchange-traded fund provider WisdomTree Investments, and he was an early advocate of fundamental index ETFs. Rather than assembling an index by its market capitalization, fundamental indexing uses other metrics such as earnings, dividend yield or book value. The goal is a passively managed fund that avoids getting overweighted in specific stocks and industries, something that happened when hot tech stocks soared during the dot-com era.

Siegel, who has taught at Wharton for 44 years, is the author of "Stocks for the Long Run," now in its fifth edition, a book that the Washington Post calls “One of the ten best investing books of all time.”

The full podcast is available on iTunesSoundCloud and on Bloomberg.  Earlier podcasts can be found on iTunes and at BloombergView.com.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Barry L Ritholtz at britholtz3@bloomberg.net

To contact the editor responsible for this story:
James Greiff at jgreiff@bloomberg.net