Item — HN Reader

> What's the argument that active managers aren't just rent seeking parasites lying about their roles?

That someone has to set prices and structurally index funds can't do that job. How are prices going to be set without active participants? You could do it by formula I guess, but that would be gamed by companies around earnings time and doesn't account for differences in industries or differences in corporate strategy.

> Why have active fees gone down if they provided value all along?

That's exactly what you would expect as more firms enter providing the same service. The same thing happens in every other market. More competition drives down margins.

If markets stop being efficient at price discovery, why wouldn't active managers and hedge funds exploit that inefficiency? In other words, why are active managers and their supporters arguing that they aren't good at their job?

(The answer is that they would exploit the inefficiency and the market would maintain efficient price discovery, but they'll get more business by fear-mongering around index funds.)