How Passive Is That Passive ETF Really? Suit Raises Question

Bloomberg and InvestmentNews
December 14, 2019

Eric Simanek was quoted in the article, "How Passive Is That Passive ETF Really? Suit Raises Question," which was published by Bloomberg on December 14, 2019.  The article also appeared in InvestmentNews on December 18, 2019.

In the article, Eric discusses the implications of a recent suit that tests the limits of passive funds and contributes to the debate over the distinction between active and passive investing. Most index-based stock ETFs commit in their offering documents to investing at least 80% of their assets in the component securities of their underlying benchmarks. According to Eric, any “wiggle room still has to be used to invest in securities or other instruments that the manager thinks will help track the index. It’s not there to be used to generate performance that exceeds the index.”

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