How the Index Fund Changed Finance and Why It‘s Still So Powerful Today

Never have so many individuals been actively engaged in trading in the equity markets. Robin Hood, Reddit, meme stocks, crypto, blockchain are the language of a whole new world of mostly young traders. And most of them will lose money.

They think they can outperform markets that have long humbled the smartest guys in the room.

So back in the early seventy, a group of those guys got together to imagine and evolve a way to passively participate in the markets. Long before information about the markets had been democratized. Long before we checked our portfolio every-time we checked our phone, the idea of passive index funds would take hold.

And even in our hyperbolic financial world today, they are still going strong. In fact, they are so powerful, they alone can move markets.

What this all means for markets and economics is worth examining. To do so I’m joined by Robin Wigglesworth, the global finance correspondent at the Financial Times and the author of Trillions: How a Band of Wall Street Renegades Invented the Index Fund and Changed Finance Forever 

 

My conversation with Robin Wigglesworth: