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The Impact of Passive Strategies on Market Microstructure
Passive and index strategies, including so called smart bata e t f, are divergent strategies with respect to new acid flows. If a flight passive were occurring within markets, we would expect to see marginal selling pressure on smaller capitalization names versus larger capitalization names. This is precisely what we have seen since the early two thousand tens, as passive grew from alf the asset share of active to parody.