Index fund rebalancing creates the most expensive, manic minutes of the trading year
If one recent research paper is correct, a majority of index funds managing trillions will be paying nearly three-times the going rate for every trade during the annual reconstitution of the FTSE Russell indexes costs that could be lessened with a few simple strategies.
By Justina Lee / BLOOMBERG
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.
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