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Cap-weighted indices - a bigger scandal than Libor?

Investors have lost billions as a result of their exposure to cap-weighted indices

The manipulation of Libor and foreign exchange rates by traders has led to an unprecedented outcry and an onslaught of regulatory probes. But the losses suffered by investors pale into insignificance compared with those they have endured through their exposure to cap-weighted indices.

The annual drag on the performance of pension schemes across the world as a result of their construction could total tens of billions a year.

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