Why Active and Passive Investment Are Not Mutually Exclusive

Last week, Bloomberg penned an article entitled Battered Funds Blame ETFs for Overrunning the Stock Market Again. The article (along with a subsequent Bloomberg sponsored podcast released around the same time) explores how passive investing could be blamed for the underperformance experienced by discretionary fundamental stock-picking managers. For anyone interested, the most recent SPIVA scorecard (as of…

ETFs Aren’t Always the Most Cost-Effective

Over the last few years there has been a lot of media attention on ETFs (exchange traded funds) and how they have precipitated a “fee war” in the asset management industry. Large asset managers like Vanguard and BlackRock have been accused of inciting a “race to the bottom” in investment management fees, squeezing margins for…

Indexed Products Aren’t All Passive

This week Morningstar Inc. released a report which estimated that as of August, in the United States, assets invested in indexed products (either mutual funds or exchange-traded funds) have now eclipsed that of assets being managed by traditional active stock pickers. In last week’s issue, we looked at debunking the myth that passive investing is…

Bursting The Passive Investing Bubble

This week Bloomberg put out an article focusing on Michael Burry’s criticisms of passive investing and how, in his opinion, it mimics the bubble in synthetic asset-backed collateralized debt obligations prior to the 2008 financial crisis. Burry, one of the protagonists in Michael Lewis’ book “The Big Short” who correctly called the financial market collapse…