Episode 360 – Gerard O'Reilly: The Components of Net Returns

This is the Rational Reminder Podcast, a weekly reality check on sensible investing and financial decision making from two Canadians. We are hosted by me, Benjamin Felix, Chief Investment Officer at PWL Capital, and Cameron Passmore, Chief Executive Officer at PWL Capital. Welcome to episode 360. Today was another amazing conversation. Ben, we had a chance to talk with Gerard O'Reilly, who, second time on the podcast.

He is the co-chief executive officer and chief investment officer, I guess co-chief investment officer at Dimensional Fund Advisors. We've been working with Dimensional for 23 years this fall since it came to Canada. And before then, our firm, we were working with them using their research for a couple of years prior to that. So obviously and regular listeners know this.

We're big fans of who Dimensional is and what they believe in and some of the ideas that they've brought forward over the years. But why don't you set up why you reached out to Gerard to come back on the podcast and I'll tell a bit of a reminiscent story afterwards. People know that we did a relatively recent episode with Marco Salmon from Harvard talking about the implicit costs of index reconstitution. So when market composition changes and indexes reflect those changes and index funds follow suit, that there are some pretty meaningful costs to those transactions, to those changes. relative to a more patient and flexible approach to investing, which is similar to what Dimensional does, similar to the the approach that they take.

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