, Columnist
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.
Photographer: Frank Rumpenhorst/AFP/Getty Images
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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.