From the investor’s standpoint, a low level of unemployment isn’t necessarily good news, says a recent Bloomberg article. However, it can bode well for active versus passive investors.

When more people are working, it says, “Wage growth can exceed economic growth, putting pressure on corporate profit margins. Interest rates can rise, tightening financial conditions. Inflation can rise, putting more pressure on central bankers to remove liquidity from the system.” For active investors, however, it presents the opportunity to outperform benchmarks, “which are much lower hurdles to beat than in the early investor-friendly stage of an expansion.”

During the current, long-winded expansion, low interest rates and stagnant monetary policy have made it tough for many hedge funds and other active investors to beat benchmarks, but the article asserts that future potential for higher interest rates and inflation along with “poorly-designed” fiscal stimulus and “the prospect of a Trump administration that haphazardly picks winners and losers in response to populist sentiment” could create winners among active investors.

“Passive investors have had reason to gloat ever since the recession ended. Now, as workers and active investors rejoice, the passive investor’s pain is about to begin.”