Never mind beating the benchmark when the benchmark is quietly making the real decisions. Gerald Ashley and George Cooper pull back the curtain on how index choice shifts risk onto investors, fuels herding, and even distorts the wider economy. From the S&P 500’s ninefold climb to the FTSE’s more modest tripling, they unpack why “go passive” still demands a critical, high stakes decision about which index to follow and which currencies to carry.

The conversation digs into the perverse logic of bond benchmarks that allocate more money to the largest borrowers, weakening market discipline and rewarding profligacy. They explore how capweighted equity indices concentrate capital in today’s winners, raising volatility and inflating bubbles, while managers hide behind relative performance. The solution starts with a better mandate: target returns above inflation, not a promise to hug an index. That shift aligns portfolios with real world goals like retirement income and purchasing power, and it demands genuine active thinking rather than closet indexing.

Governance gets a frank assessment too. With proxy voting often outsourced,
economic priorities can be diluted by political agendas, leaving savers to fund unclear trade-offs. Gerald and George argue that if society wants cleaner air or fairer work, those costs should be priced by policy, not buried in passive voting guidelines. Yet there’s optimism: index flows have created a market split between crowded themes—think AI infrastructure—and overlooked “antibubble” assets. For investors willing to do the work, that dispersion offers real value and better odds of compounding above inflation. If you care about real returns, not just neat tracking error, this is a reframe worth your time. Follow the show, share with a friend who loves a good debate, and leave a review with your take on benchmarks—do they help you stay disciplined, or are they holding your portfolio back?

This episodes book recommendations

Gerald
The Origin Of Wealth: Evolution, Complexity, and the Radical Remaking of Economics

George (A film)
In Time – starring Justin Timberlake