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Index-Fund Trillions Are Distorting Prices in the S&P 500

  • Study shows passive flows are creating valuation distortions
  • Smaller stocks neglected by index cash eventually outperform
RF markets stocks
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Investors who poured trillions of dollars into index funds on the conviction that no one can beat the market may actually be making it easier to do just that.

All that dumb money could be offering wily stock pickers a chance to buy smaller companies on the cheap, according to new research.