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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
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High active share funds are now the worst performers
Active share was meant to identify fund managers worth paying for. A new study covering four decades of US fund data finds that high active share funds now systematically underperform low active share funds. The reversal began in 2010 and coincides with the rise of passive investing creating structural pressure on active managers.
Robin Powell
Aug 175 min read
Why active funds underperform even when the manager picks well
The managers running the biggest active funds picked stocks that beat the market in 2025 — and most still lagged their benchmark. A Morningstar do-nothing experiment and a body of academic research explain why active funds underperform even when the picking is good: skilled buying undone by poor selling, the hidden cost of trading, and the incentives that keep managers churning. The UK evidence points the same way.
Robin Powell
Jun 87 min read
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