Investing in Index Funds Is No Longer Passive
- Classification no longer make sense, says Bernstein team
- Large number of indexes makes choosing fund an active decision
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Passive has gotten so large that it’s killed everything in its path -- including itself. Welcome to the “Passive Singularity.”
There are now so many indexes that putting your money in an index-tracking fund is a move requiring an active decision, according to researchers at Sanford C Bernstein & Co. The industry’s growth has even forced active managers to focus on selecting indexes themselves -- be that to invest in, or to benchmark against.