SPECIAL REPORT: SHARE INDICES


Reading time: 23 minutes


Demand for cheaper funds drives growth in share indices


MUCH OF THE AVALANCHE OF INVESTMENT INTO PASSIVE FUNDS IS GOING INTO PRODUCTS TRACKING NUANCED INDICES, AS WELL AS STALWARTS SUCH AS THE S&P 500. BRADLEY GERRARD REPORTS ON THE SIGNIFICANT IMPACT OF INDEX INVESTING


T


he proliferation and development of share indices, which chart the value of a group of stocks and act as a benchmark against which fund managers are measured,


has been a major theme of the investing world in recent years. Commentators continue to focus their


attention on active investing when analysing how investors react to an event. They will look, for example, at how investors could or


should reposition themselves by buying shares in energy companies if they think oil prices might rise in response to events such as the war in Ukraine. For better or worse, investors who have


bought passive products have no such worries. They, and the firms that supply the products, don’t have to react to the latest twists and turns of the headlines. The rules governing what is included in such products are already decided.


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THE REVIEW MARCH 2023


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