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Brace for the Most Expensive, Manic Minutes of the Trading Year

  • FTSE Russell reconstitution dramatically boosts stock volumes
  • Paper shows passive funds pay nearly 3-times more to trade

In 1991, Nobel laureate William Sharpe dropped a bombshell on the finance world with a paper arguing the “average” active manager will always lose out to passive strategies after fees. 

His insights helped pave the way for a more than $10 trillion index-fund frenzy over the next three decades, yet they hinged on some key assumptions -- including that active managers “must pay more for trading.”