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Why doesn't an index fund that tracks an index consistently outperform the index?

Why doesn't an index fund that tracks an index (like the S&P) consistently outperform the index? I understand the fee structure to pay for turnover as well as for minimal management. However, shouldn't the fund profit enough off of stock leasing to a short seller to generate enough returns to outperform the actual index?

Mutual Funds, Stocks
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December 2018

The premise of your questions is really spot on. Yes, an index fund can earn a significant amount of money lending their securities to short sellers. But, since securities lending is an activity of the fund company, and not the fund, this income is not put back into the fund. This income is added to the other income the fund company makes. As an example, you can look at page 11 of BlackRock's 2017 10-K filing for an explanation of how they handle securities lending. 

Additionally, since index fund expense ratios have been driven so low, the fund management likely needs this income to help pay the fund expenses. While index funds don't have the larger (some would call bloated) budgets that active funds have for fund management and analysts, the index funds still pay significant sums for SEC filings and other regulatory costs. Considering many index funds can be found with expense ratios below 0.1%, the fund companies are looking for all the money they can get.

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