Indexing-Mania: 3 Implications of the Shift From Active to Passive Investing

Passive indexing has undergone a surge in the past decade, with some sources reporting that the fraction of global assets under management that are indexed has doubled from 25% ten years ago to 50% today. In this piece, we address some common questions surrounding this shift:

  • Will indexing increase the likelihood of bubbles?
  • How will increasing levels of indexing affect the performance of active managers?
  • Will markets be less efficient as more and more investors index?