Investing doesn’t have to be complex to be effective—even for the wealthiest among us. In fact, high-net-worth individuals (HNWIs) and ultra-high-net-worth individuals (UHNWIs) can often benefit more from straightforward, low-cost passive funds than from exclusive, high-fee active strategies.
The notion that wealthy clients need elaborate investment plans can be more about prestige than performance. Financial advisers may feel pressured to recommend complex strategies, especially for wealthy clients, but often, these intricate products don’t yield better returns. As we discuss in our full paper, simple index strategies like passive funds offer a more reliable, cost-effective way to achieve market returns, backed by evidence-based results over decades.
Our Tracker 100% Equity portfolio is a prime example. This passive strategy—designed to closely mirror global markets—has outperformed the majority of active management options in recent years. For both affluent investors and everyday individuals, this approach ensures high returns at minimal cost.
Family offices (which manage the wealth of the ultra-wealthy) are also increasingly turning to direct indexing—a tailored, tax-efficient form of index investing—to balance growth with risk. Even Warren Buffett, one of the world’s wealthiest individuals, advocates for the power of simple index funds. He’s famously demonstrated that, over the long term, indexing can outpace the high fees and low returns of many active strategies.
So why do passive funds work so well? They offer low costs, transparency, and diversification that helps investors build wealth over time without unnecessary fees. As the paper explores, a straightforward approach may not be flashy, but it’s one of the most effective ways to capture market gains.
To read the full analysis, download the paper here.
