It’s time to shed a bright light on one of Bay Street’s most annoying and well-hidden practices. It’s known as “closet indexing” and occurs when a financial planner, bank or mutual fund company sells you a fund that is supposed to be actively managed but actually hugs the market benchmark. New research suggests that Canada’s mutual fund industry has earned the dubious distinction of being the world leader in closet indexing. In their paper, Indexing and Active Fund Management: International Evidence,” four professors of finance – Martijn Cremers ...