#084 Michael Green On Passive Investing Creating Distortions In The Market Right Now
The Julia La Roche Show
00:00
The Growth of Passive and Systematic Strategies
The growth of passive and systematic strategies has actually been a byproduct of regulatory change in environment as well as a mix change in environments. In 2006, the rules changed quite substantively with the introduction of the Pension Protection Act under the Bush administration. That suddenly changed 401k's from what had been an opt-in to an opt-out system. The minute you did that, you suddenly had to choose a default investment so that if somebody opted in or did fail to opt out their money just didn't sit in a money market fund in cash, that it was automatically invested. Under lobbying from Vanguard and others in 2012, that QDI designation shifted to what are called target date funds. Those
Transcript
Play full episode
