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Not really, the big index fund providers are smart and they even pre emptively buy companies likely to be added to the index, and they sometimes wait a bit befo
by HappyTypist 11y ago
Not really, the big index fund providers are smart and they even pre emptively buy companies likely to be added to the index, and they sometimes wait a bit before rebalancing to their index. This intentional randomness makes it very difficult to front run index funds.
- SilasX 11y agoIsn't that, itself, a species of active management?
- arielweisberg 11y agoIt could be construed as such. Really it's all about execution strategy. If your concern is that it's active you can always check to see how well the fund tracks the index. The reality is that they track the indexes so well that it doesn't matter. At least for total market or S&P 500 funds. There are problematic indexes that don't seem to get tracked well by funds.