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A mandatory ceiling on deposit rates deprives savers of the market return on their money.
Customers receive either two or three times any market return up to 7% or 8%.
But indexed funds do not employ rocket scientists to reproduce the market return.
To investment professionals, "alpha" is the return over and above the market return.
The case Mr. Bogle and his allies make is that, as he puts it, "the market return is the market return".
We allowed for a stock market return of just 3% after charges.
That higher return, known as alpha, against the market return, or beta, is what proponents of hedge funds push.
Investors are happy to pay high fees for the skill, but regard the market return as a commodity.
In order to earn more than the market return, you have to take money from somebody else".
What I do is challenge investors to say: "Don't tell me what the market return will be.
"Getting the market return for clients is a good thing," said Craig Ueland, chief operating officer at Frank Russell.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com