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
Active fund managers keep warning about passive investing's dangerous rise. But new research covering $784 billion in institutional assets reveals active management still dominates — capturing 97% of all fees paid.
Robin Powell
Jan 216 min read
SUBSCRIBE
Simply provide your email address to receive our regular update.
