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Re:Retirement Savings Are Fueling the AI Bubble by csdreamer7 on Wednesday November 11, 2026 @09:16PM (#50462229)
Not as clear cut as that. There is a delay before an index rebalances, indexes have tracking error that influences how closely they follow and 'passive funds' do active trading to snip deals on the market.

I forget the name of the yt channel, but they did an interesting interview with Vanguard reps. The reps said that active funds will often need to liquidate assets they will sell at a discount to an index fund directly that will buy it anyway. They don't want to sell to the public market as that would reduce the value of their assets still on the books. In this way a passive fund can take advantage of an active fund and is one of the reasons why many active funds struggle to beat a passive one year after year.

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