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"If everyone's an indexer, then they're not investing on fundamentals, just buying the biggest stocks in the index," said Jeremy DeGroot, chief investment officer of Litman/Gregory, a company that creates portfolios using multiple active managers.
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CAN active managers outperform?
Active managers are very different.
A chance, then, for active managers to prove their mettle.
This gives active managers a great marketing advantage: hope.
In such markets, he said, "active managers tend to outperform".
Most active managers cannot beat the indexes, he argues.
But unlike active managers, index managers can't sell poorly run companies.
But both active managers and passive managers can agree that closet indexers don't help the industry.
Active managers can't beat indexes, right?
These new index managers are in fact active managers.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com