Jacob Lew, who President Barack Obama has nominated to replace U.S. Treasury Secretary Timothy Geithner, is apparently a fan of index-based ETFs.

Lew’s 2011 financial disclosure form “reveals an investment strategy predicated on low-cost, low-management assets that don’t divert a lot of money to bankers’ pockets,” reports Tim Fernholz at Quartz.

Most of his retirement investments are managed by TIAA-CREF, the nonprofit firm that oversees assets for employees in the academic, research, medical and cultural fields.

“Lew likely began taking advantage of the organization’s low-cost offerings during his career as a Congressional staffer,” Quartz reports.

“The bulk of his remaining investments …  are in low-cost index funds. Rather than pay high fees for fund managers, Lew has purchased exchange traded funds that invest in a broad range of equities, rising and falling with the markets,” according to the story. “These kinds of investments are increasingly popular for investors looking for profit at a time of scarce returns: After all, an investment in an S&P 500 index ten years ago would have significantly out-performed an investment in hedge funds during the same period.”

A simple ETF portfolio of stocks and bonds easily outperformed the average hedge fund again in 2012 and without charging 2% management fees along with 20% of profits. [ETFs vs. Hedge Funds]

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