Justin Fox, Columnist

When MSCI and S&P Rule the World

With index funds poised to dominate investing, will index makers leave Snap (and maybe even Facebook) out in the cold?

June 23, 2017 at 2:00 PM UTC

Justin Fox is a Bloomberg Opinion columnist covering business, economics and other topics involving charts. A former editorial director of the Harvard Business Review, he is author of “The Myth of the Rational Market.”

Tyrant.
Photographer: Drew Angerer/Getty Images

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Sometime in the next four to seven years, passive investment vehicles will come to constitute more than 50 percent of assets under management in the U.S., analysts at Moody's Investors Service predicted in February.

This incipient triumph of index mutual funds and exchange-traded funds is to a large extent a triumph of common sense. Decades of research has shown active money management to be, on balance, a really bad deal for customers. With their emphasis on low fees and low turnover, index funds are for the most part a much better deal.