Michel Pireu Columnist

The Index Industry Association has published the results of its second annual global index survey. The results suggest that there are 3.727-million indices globally. — Abnormal Returns It prompted Matt Levine at Bloomberg.com to ask: isn’t every investment fund now an index fund, indexed to the index of itself? His reasoning: in some science-fictional universe if you do everything right you will be able to write an algorithm that picks exactly the stocks that Warren Buffett would pick, at exactly the same time and in exactly the same proportions, and that algorithm would be the Perfect Warren Buffett Index. The point of this little thought experiment is not really that this would be a good index (it’s not all that "indexy") or a good index fund product (it sure would be!). And it’s certainly not that it is possible at present (it sure isn’t!). Unchanging list The point is that the word "index", in its modern financial product usage, is capacious. The original idea of a stock index w...

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