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Two words explain why no pension fund has yet installed a fundamental indexing strategy as the core of its equity portfolio, according to one of the concept’s originators, Rob Arnott
– “maverick risk”. About the closest a fund has come is CalPERS, which views fundamental indexing as an enhanced index play,
and recently approved a further
expansion of its US$2 billion
commitment to the concept. But
that’s a drop in the ocean in
the context of a US$177 billion system.
The funds management industry is in trouble. Of that there is little doubt. Head count among the major managers has been cut by at least 10 per cent, according to a Watson Wyatt report last month. Among hedge fund managers, the head count is down an average 20 per cent. And the worst is yet to come, from the funds managers’ business perspective. 
One of Ian Silk’s favourite quotes about the 2006 merger between STA and ARF is that “the planets were in alignment”. Perhaps a minor astrological miracle is what it takes for a super fund merger to get up these days, because nothing remotely comparable to the $20 billion get-together that created AustralianSuper has happened since. 
Working with doctors and administrators to improve the group insurance experience
