Monthly Archives: May 2016

In this piece, I’m going to introduce a simplified model of a fund market, and then use the model to illustrate certain important concepts related to the impact of the market’s ongoing transition from active to passive management.  Some of … Continue reading →

The growing popularity of passive investing provokes a series of tough questions: What necessary functions does active management perform in a financial system? What is the optimal amount of active management to have in such a system, to ensure that … Continue reading →

The prior piece received a much stronger reaction than I expected.  The topic is complicated, with ideas that are difficult to adequately convey in words, so I’m going to use this piece as a follow-up.  I’m going to look at the … Continue reading →

U.S. equity index funds have grown dramatically in recent decades, from a negligible $500MM in assets in the early 1980s to a staggering $4T today.  The consensus view in the investment community is that this growth is unsustainable. Indexing, after all, is … Continue reading →