How Passive Investing Could Change Capitalism

The biggest macro trend in investing is the rise of so-called "passive investing," as investors shun individual security selection, and instead just buy funds that are linked to to entire indices. But while this may have advantages for the individual investor, it raises a whole new host of issues, such as elevating the role of index designers, and decreasing the emphasis on studying individual companies. On this week's Odd Lots podcast, we speak with Bernstein's Inigo Fraser-Jenkins who once wrote a note that said passive investing is "worse for society than Marxism." We discuss what he meant by that, why this trend has him concerned, and how active management can make the case that it adds value.

Dec 14, 2018

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