There is no doubt that the line between passive (beta) and active (alpha) investing is becoming blurred.  “Actively managed ETFs” are a great example.  So are “passive” hedge fund replication products that reply on what appears to be an active, albeit primitive, trading strategy.  In fact, many investors now recognize that the active management of passive indexes is a primary source of active alpha.

The key to creating “alpha out of beta” is the existence of a set of liquid and transparent indexes.  One of the hallmarks of good index is its ability to capture some underlying market dynamic, like the equity risk premium or the price of gold or some “exotic beta”.  But an index of active managers?

That’s just what Active Index Solutions has devised.  According to the firm’s website, their apparently French-inspired “Actifindexes” were:

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