There is little disagreement among market observers that passive investing is growing. There is also little dispute that the trend is likely to continue as a result of the rise…
Tag: Passive Investing
Is Passive Investing Distorting the Market?
By Jack Forehand, CFA (@practicalquant) I usually like to write articles where there is a clear conclusion at the end. I also usually like to write about topics that I…
Interview: Liquidity Cascades with Corey Hoffstein (Ep. 45)
It has been said that the most dangerous words in investing are “this time is different”. But sometimes a confluence of factors come together to significantly change the character of…
Excess Returns, Ep. 36: Have the Fed, Narratives and Passive Flows Broken Fundamental Investing?
Valuing a company (or the market in general) typically involves looking at its price and judging that price relative to its current and projected future fundamentals. But some have argued…
Why Stocks Owned by Passive Funds Did Worse in Selloff
A study conducted by the investment firm Leuthold Group found that stock sectors with the heaviest level of passive ownership fell more than the broad market during this year’s selloff.…
If Everyone Indexes, What Happens?
As passive investing continues to gain popularity, concerns have materialized about some unintended consequences, according to a recent article inMorningstar. The article outlines an interview with Morningstar’s director of passive…
Michael Burry of The Big Short Sees Passive Investing Bubble
Michael Burry, whose bet against mortgage securities before the 2008 crisis was immortalized in the film “The Big Short” sees another contrarian opportunity in what he characterizes as a “bubble”…
A First: U.S. Passive Matches Active AUM
As of the end of April, assets in passive domestic stock funds reached the level of those held by active managers–$4.3 trillion. This according to an article in Institutional Investor.…
Higher Returns on Fewer Stocks: Vanguard Debunks "Best Ideas" Portfolio Philosophy
A recent study by a team at Vanguard contradicts the idea adopted by many investors and financial professionals that “broadly diversified portfolios are inferior to concentrated portfolios made up of…
Zweig and Grant on the Pressure to Go Passive
On a recent episode of WealthTrack, Consuelo Mack interviewed financial journalists Jason Zweig and James Grant regarding the lagging performance of value stocks and the pressure to move to passive…