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AQR's Asness Says Active Management, Not Passive, Is Too Big

  • Passive products absorbed a record $510 billion through 3Q
  • Even so, AQR boss says market is moving in the right direction
Cliff Asness, co-founder and managing principal of investment firm AQR Capital Management LLC

Cliff Asness, co-founder and managing principal of investment firm AQR Capital Management LLC

Photographer: Chris Goodney

Not every money manager is sounding the alarm on the passive-fund industry, which this year has absorbed a record half-trillion dollars.

Cliff Asness, co-founder of AQR Capital Management, says the steady flow of assets into cheaper, passive funds has been a positive development for the industry. Active managers have historically overcharged for scant returns and the shift toward questioning whether high fees are deserved is a healthy change, he said.