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Lumifer comments on Open Thread, September 30 - October 6, 2013 - Less Wrong Discussion

4 Post author: Coscott 30 September 2013 05:18AM

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Comment author: Lumifer 01 October 2013 04:14:30PM 2 points [-]

They do because their promise is to match the index, not produce better returns.

Moreover, S&P500 is cap-weighted so even besides membership changes it is rebalanced (the weights of different stocks in the portfolio change) on a regular basis. That also leads to rather predictable trades by the indexers.