Err... An index fund is no different than an actively managed fund save that instead of trying to actively rebalance the fund they just buy a basket of stocks o

Err... An index fund is no different than an actively managed fund save that instead of trying to actively rebalance the fund they just buy a basket of stocks or what have you to try and model some index. That fund is just transacting in stocks, bonds, or other assets. The liquidity they might provide is to the broader market by buying and selling assets like any other investor, just doing it with the pool of money provided by fund participants. If you have a problem with that you should be concerned by any fund, actively or passively managed, including mutual funds, hedge funds, etc, as they all operate on the same basic principles.