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For example, what do the portfolio managers for the TD Canadian Index Fund (TD Asset Management) actually do?

There should not be any need for portfolio managers, because no trading is involved. Also, an automated system will re-balance itself based on the index. Right?

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There still is some buying and selling to do in a passively-managed fund. The stocks might pay dividends. If the fund manager didn't reinvest these dividends, the fund would begin to accumulate a cash position, which would cause it to stray from being an index fund. Stocks come and go from an index as well; if the fund is to maintain a composition that matches a particular index, this must be taken into account as well.

The role of the manager is to ensure that the fund maintains the composition that it was intended to replicate. It doesn't involve as much "stock picking" that active managers do. The manager has less leeway as to what s/he buys and sells, but there still is work involved.

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    Also to the degree that it exceeds the normal cash buffer the fund maintains, you also need someone to invest proceeds when there is a net influx of money into the fund, and sell assets when there is a net outflow. – Chuck van der Linden Jun 13 '11 at 8:05
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There is trading, and while it can be automated, someone has to define the rules for the automated system. Why not call that person the manager?

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