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The name for the product category you're broadly describing is "smart beta." This exists in quantity. "SPY but without overvalued stocks in it", etc etc. The r
by patio11 7y ago
The name for the product category you're broadly describing is "smart beta." This exists in quantity. "SPY but without overvalued stocks in it", etc etc.
The reason the exact product you want doesn't exist is because it will have the same returns as SPY but cost 20X as much due to lower economies of scale, broadly because people don't want it.
- devicetray0 7y ago> but cost 20X as much due to lower economies of scale, broadly because people don't want it. For any existing fund manager who tracks an index (i.e. Vanguard), this shouldn't be too difficult or expensive. They're already buying/selling a TON of SP500 shares at the close of trading day. Now they just need to subtract some of those buys/sell for the overvalued companies that people do not want. Am I missing something? EDIT: Oh, I guess the (SEC?) would require a different fund management and prospectus for every index "smart beta" permutation, and therefore wouldn't be realistic.
- acjohnson55 7y agoWhenever I feel the need to use the adverb "just" when talking about something I think someone else should do, it usually means my understanding of the situation is the tip of an iceberg I can't fully see.
- asdfman123 7y agoOh man, reading up on that, smart betas could exercise enormous power over the market if they became popular enough. Imagine if someone was able to immediately exclude you from 20% of investment capital on the market.