Active Index Investing

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Matthew Scanlan contributed Chapter 3, “The Ever-Evolving Uses of Indexing: Why the Active versus Index Debate Is Over,” to this landmark Wiley Finance volume edited by Steven Schoenfeld. The chapter traces the development of index investing from its origins through its expansion across equity styles, international markets, and asset classes, examining both the empirical case for indexing and the persistent myths used to argue against it in specific market environments.

Scanlan’s contribution argues that the framing of active versus passive is a false choice. Indexing, he contends, should be understood not as a concession but as a strategic building block within a holistic investment program — one that allows investors to allocate their active risk budget more deliberately. The chapter remains a reference point in the literature on institutional index strategy.