These poignant remarks to a graduating business school class allude to the philosophy that has driven a part of the index industry.
The author proposes a solution for equity indexes that he says do not accurately reflect current market judgement and therefore CAPM.
The more indexing has grown, the more that reconstitutions and index changes have become a drag issue for investors.
Indexes can be as active in their methodology as many managers are. The authors discuss the intelligent index and its uses.
From the Journal of Indexes - The author unveils a methodology that seeks to incorporate the collective decisions of fund mangers into investable benchmarks in an article that was originally published in the Journal of Indexes in Q2 of 2002.