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How much passive investing is too much?

Warnings that index funds have broken the stock market all imply a threshold: a share of the market at which price discovery fails. Nobody making the argument names it. Owen Lamont, writing in the Financial Analysts Journal, argues that no such number exists short of complete passive ownership, and that what actually determines whether prices stay informative is who is left doing the trading. His case, the strongest peer-reviewed research against it, and what the performance

Robin Powell

Factor-based strategies are doing fine — it’s the narrative that’s broken

Factor-based strategies are delivering strong returns, especially internationally. The 2025 performance surge proves the death narrative was wrong.

TEBI

Jun 16, 20258 min read

Why Nobel Prize-winning economists reject active investing

Eugene Fama is one of several Nobel Prize-winning economists whose research undermines the case for using actively managed funds This is the second article in our 12-part series on Mark Hebner's Index Funds: The 12-Step Recovery Program for Active Investors. If you missed the first instalment on the addictive nature of active investing, catch up before continuing. In traditional recovery programs, the second step involves acknowledging a higher power. For investors trapped i

TEBI

Jun 12, 20253 min read

Active investing: Be honest, are you a little bit addicted?

Active investing feels productive. Buying. Selling. Chasing hot tips. As investors, we think we need to be doing something. But it can easily become compulsive — an addiction that’s fed by financial professionals who profit from keeping us hooked. In his award-winning book, Index Funds: The 12-Step Recovery Program for Active Investors, my IFA colleague Mark Hebner explains why active trading is so tempting — and so destructive. He also sets out a rational alternative to acti

TEBI

Jun 5, 20251 min read

Ten timeless investment lessons from The Intelligent Investor

Speaking on Morningstar's The Long View podcast in May 2025, Wall Street Journal columnist Jason Zweig offered sobering advice for investors grappling with unprecedented market uncertainty. As global markets wrestle with President Trump's sweeping tariff policies, Zweig warned: "We don't know that fundamental rules haven't changed...but that's an awful lot of things to be right about" when making dramatic portfolio changes. Zweig's commentary comes as he prepares the latest e

TEBI

Jun 2, 20256 min read

A female magician performs a conjuring trick. IRR, says Ludovic Phalippou, has become "the theatre of private equity performance" — a beautiful illusion that crumbles under scrutiny.

How IRR manipulation deceives private equity investors

Private equity firms use IRR manipulation to claim impossible returns. KKR boasts 25.5% annually since 1976, Apollo claims 39%. But if KKR's first £31m fund truly compounded at 26%, it would be worth £2.6 trillion today. As Professor Phalippou explains, "IRR has become the theatre of private equity performance." With retail investors increasingly targeted, UK regulators must stop this deception.

TEBI

May 27, 20255 min read

Fund performance persistence: what the latest evidence shows

Bottom line up front: If you're choosing funds based on past performance, you're likely wasting your time and money. Comprehensive research spanning decades reveals that consistent outperformance among active fund managers is so rare it might as well be random chance — and the few exceptions typically reflect luck rather than skill. The investment industry loves to remind us that "past performance is no guarantee of future results," yet this disclaimer appears to fall on deaf

TEBI

May 26, 20256 min read

The case for working beyond retirement age

Retirement is an outdated concept. More and more people are finding that working later in life can boost health, purpose and income.

TEBI

May 19, 20255 min read

Don't let emotions affect your investment decisions

Even the most experienced investors aren’t immune to emotional influences. In fact, fear and overconfidence frequently cloud our investment decisions, often leading to poor outcomes. PAUL RICHARDS from Better Decisions explains that emotions evolved to keep us safe — but they don’t help much when it comes to modern investment decisions. Fear can drive us to sell at the wrong time, just as hope and greed might encourage excessive risk. The challenge is learning to spot when em

Robin Powell

May 19, 20254 min read

Active vs passive — a journalist's view

JONATHAN CLEMENTS is one of the best-known names in financial journalism. After starting his career writing glowing profiles of star fund managers, he began to see a pattern: most of them failed to deliver over the long run. Raised and educated in England, Clements moved to the United States after graduating from Cambridge University. His early years at Forbes magazine left him sceptical about active management. Even when a fund manager looked like a sure bet, the success rar

Robin Powell

May 19, 20253 min read

Hot funds look great — until they're not

Hot funds often attract a rush of investor cash. But new research shows they’re more likely to underperform once they’ve hit peak popularity. Here’s why chasing recent winners could leave you trailing the market.

TEBI

May 8, 20255 min read

Vanguard at 50: Proud history, bright future?

Vanguard’s 50-year journey has transformed how everyday investors access and benefit from the financial markets. As it marks this...

TEBI

May 2, 20253 min read

Tune Out The Noise: Have you seen it yet?

In a world of financial noise, a groundbreaking documentary advocates for evidence-based investing. It's time to Tune Out the Noise and...

TEBI

Apr 30, 20253 min read

Three positive consequences of the growth of indexing

The rise of indexing has been one of the most significant investment trends of the past few decades. While some critics worry it could...

TEBI

Apr 28, 20253 min read

Will Trump help active management recover its mojo?

Donald Trump’s return to the White House has investors on edge — but does more uncertainty mean it’s time to abandon passive funds in...

Robin Powell

Apr 22, 20255 min read

Are active funds better in bear markets?

It is often claimed that active funds offer greater protection in falling markets. Unlike index funds, active managers can hold cash or shift into bonds to avoid losses. But the evidence suggests otherwise. According to TIM EDWARDS from S&P Dow Jones Indices, most active funds fail to beat the market in bear phases just as they do in bull runs. If you are worried about downside risk, there may be better, cheaper solutions than relying on active management. 1. Active funds sti

Robin Powell

Apr 14, 20253 min read

The tariff crisis: How scared should investors be?

Legendary investor and mutual fund pioneer Sir John Templeton apparently once said: “The four most dangerous words in investing are 'This...

Robin Powell

Apr 12, 20255 min read

Did government bonds do their job in the tariff turmoil?

A debate has raged in recent years about the wisdom or otherwise of investing in government bonds. I’ve advocated their inclusion in portfolios for a very long time, and still do. But I have to say I’m less enthusiastic than I was, for reasons I’ll explain. But first, how did government bonds perform in the recent tariff crisis? After all, it’s when markets are volatile and stock values fall that bonds, such as Treasurys in the US and gilts in the UK, come into their own. As

Robin Powell

Apr 8, 20254 min read

Avoid advisers who recommend active funds

Before choosing a financial adviser, it is essential to ask the right questions. One of the most revealing is whether they recommend active or passive funds. Actively managed funds come with higher costs, and over time, those fees eat into returns. As investment author ANDREW HALLAM explains, the odds of outperforming low-cost index funds with active funds are slim. The good news is that more advisers are now turning to low-cost passive funds. If yours does not, it may be tim

Robin Powell

Apr 7, 20253 min read