Episode 355 – Do Index Funds Incur Adverse Selection Costs?

This is the Rational Reminder Podcast, a weekly reality check on sensible investing and financial decision making from two Canadians. We're hosted by me, Benjamin Felix, Chief Investment Officer at PWL Capital, and Dan Bordelotti, portfolio manager at PWL Capital. Happy to be back. Welcome to episode 355. Our episode formats are super confusing.

This is one of those episodes where it's not technically a guest episode, it falls in the place of of where we'd have an episode with just us hosts talking about a topic. But for the main topic, we have a guest. It's very confusing. But we still have the after show.

It is a great guest. We still have the after show and we still do a little intro. We have Marco Salmon back to talk about one single paper, which is why he was the main topic in an episode instead of being a full episode because we thought it wouldn't be enough content, but we ended up talking to him for about an hour anyway. It's really interesting research that he's come up with on the nature of index fund rebalancing, and it shows some cracks around the edges of Bill Sharp's famous arithmetic of active management, which is something that may be surprising for a lot of listeners to hear that there are cracks in that logic.

We already have this episode, so unlocking it is cheap and permanent: the full transcript (63 minutes, 13,288 words), segment and word-level timestamps, and .txt, .srt, .vtt and word-level JSON downloads, as many times as you like, forever.

No account needed, we create one from your checkout email. With credits it is 1 credit; packs start at 5 episodes for $3.49, and monthly plans are cheaper still.