Robots, Rogues and Regulation

Robots vs. humans.

We've talked before about the branding potential of the term "index fund." These days, index funds are viewed as good, sensible, efficient, low-cost investment products, in contrast with actively managed funds, which are viewed as expensive and dumb. If you run an actively managed fund, one option is to push back on that perception by touting the benefits of active management. But there is another option. You can just call your actively managed fund an "index fund." It takes some work -- you have to have some process to turn "a list of stocks that I picked" into "an index" -- but it is surprisingly achievable. I mean, who's to say that one list of stocks is an index and another list of stocks isn't? Standard & Poor's? Who put them in charge of indexes? Really any list of stocks, viewed in the right light, is an index, so any fund can be an index fund. You don't even necessarily have to lower your fees.