Index Funds Channel Investor Gains to Companies and Insiders

On the first few trading days of every month, America’s paychecks hit the stock market. Most 401(k) contributions now default into index-tracking funds, which buy the same stocks in the same proportions whatever the price. New research shows this tide measurably lifts the funds that hug the index and sinks the managers who dare to deviate from it; a few basis points at the turn of each month, every month, for 15 years running.