Index Funds: Funds and York Times

index funds: Read Opinion Why the mania' for index funds won't derail the stock market This is how Robert J. Jackson Jr., a member of the Securities and Exchange Commission, and Steven Davidoff Solomon, a professor at the University of California, Berkeley, Law School, put it in an article published Feb. 18 in the New York Times But there's a problem The indexes these funds are based on may not be as neutral as they seem, according to Market Watch. The firms that devise these indexes face little regulatory scrutiny and can face significant conflicts of interest, which have the potential to harm American investors. A recent op-ed in the New York Times cautions that passive index funds may be vulnerable to bias, and possibly manipulation, as interest in those funds has ballooned over the past decade. For instance, MSCI added Chinese issuers to its emerging markets index after what The Wall Street Journal said was pressure from the Chinese government. Jackson and Solomon added in the Times article Conflicts of interest should worry anyone who is invested in index funds, which includes many Americans with retirement accounts. Another conflict is when the index and fund are run by the same managers, which can be the case for highly customized indexes. (news.financializer.com). As reported in the news.