Passive investing, where asset managers have only to mirror a given index, is meant to be easy. But the painstaking process of buying and selling securities to match an index’s returns can sometimes feel like trench warfare.
“The index doesn’t suffer transaction costs, so you’re always losing,” sighs one indexing chief at a top firm. “You sweat every yard.”
The latest tactic in the fight to maintain returns is to eke out better pricing for trades when managers rebalance portfolios as indexes c