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Opinion
Nir Kaissar

Stock Pickers Are Just Imagining an Index Bubble

Active managers fear the money pouring into their passive rivals.

It’s not the container that matters, but what’s inside it.

It’s not the container that matters, but what’s inside it.

Photographer: Frank Rumpenhorst/AFP/Getty Images

Spoiler alert: Index funds are no bubble.

It’s not terribly surprising that active managers loathe index funds. It can’t be pleasant to watch their time-honored craft reduced to a computer program and sold for a pittance. Some managers have fought back by accusing index funds of promoting monopolies and distorting markets, among other horrors, but it hasn’t stemmed the wave of money flowing to index products.