A manifesto for change

CONTRARIAN INVESTOR

In academia and policy-wonk land, a radical idea is beginning to take shape with potentially profound consequences for everyone who works in investment.

A motley crew of dissidents are arguing the global financial services industry has turned into a bloated leviathan that needs to be cut down to size. Much of this work is based on earlier research by US academics and polemicists such as Kenneth French and John Bogle. A few years back, French concluded the cost of active investing was $7bn in 1980, $30.5bn in 1993, and $101.8bn in 2006. Thus, in 2006, investors searching for superior returns in the US stock market consume more than $330 in resources for every man, woman and child in the US. Bogle, of Vanguard fame, also looked at the c...