Bite-Sized Business Law The Index Revolution: How One Heretical Idea Changed Investing Forever
Index funds may seem like a no-brainer today, but they were once dismissed as boring and even reckless. In this episode of Bite-Sized Business Law, host Amy Martella is joined by Robin Wigglesworth, global financial correspondent for the Financial Times, where he serves as the editor of Alphaville, and author of Trillions, to trace the unlikely rise of passive investing and what its future holds. Robin recounts how renegade academics and innovators built the first index funds, challenged Wall Street orthodoxy, and sparked a quiet revolution that democratized investing. He brings to life colorful characters like Jack Bogle and Mac McQuown, whose stubborn determination made indexing mainstream. The conversation then turns to today’s challenges, from the explosion of ETFs to the concentration of corporate power among the “Big Three” asset managers. Robin also shares his views on ESG, shareholder activism, and the risks of over-financialization. He offers a preview of his upcoming book, The Greatest Show on Earth, which explores the overlooked but powerful history of the bond market. Listen in for a fascinating journey through the past, present, and future of investing!
Key Points From This Episode:
- Some background on Robin and how he became a financial reporter.
- Why he wrote Trillions and how index funds became “the water” of investing.
- The first index funds and the academics who proved that active managers underperform.
- How figures like Mac McQuown and Jack Bogle made indexing mainstream.
- The role of Boston, Chicago, and San Francisco in the indexing story.
- Personal reflections on Jack Bogle: his drive, and his complicated legacy.
- Today’s indexing challenges: ETF proliferation and the blurred line between active and passive.
- Concerns about power concentration among Vanguard, BlackRock, and State Street.
- The debate over ESG, shareholder activism, and symbolic divestment.
- Why index funds still beat most active managers in the long run.
- Human nature and why many investors still choose active management.
- An overview of Warren Buffett and his lasting legacy.
- Robin’s thoughts on AI, systematic strategies, and the future of markets.
- A sneak peek at Robin’s next book, The Greatest Show on Earth, on the 1,000-year history of the bond market.
Links Mentioned in Today’s Episode:
Robin Wigglesworth
Robin Wigglesworth on LinkedIn
Financial Times | Alphaville
Fordham University School of Law Corporate Law Center