The Long View
Bryan Armour: Is Index Investing’s Superpower Unstoppable?
Mar 19, 2024
Discover the unstoppable rise of index investing with Bryan Armour, covering active vs. passive funds, market implications, fund fees as return predictors, and global fund flows. Explore the dominance of passive investing, the evolution of Bitcoin ETFs, covered call and dividend-focused ETFs, direct indexing benefits, and manager strategies. Dive into insights on wealth platforms, advisor preferences, model portfolios, active ETF growth, and the future of crypto ETFs.
50:44
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Quick takeaways
- Passive investing's cost efficiency and tax advantages drive its dominance in the market.
- Shift towards passive fixed income funds highlights suitability in areas with rich information embedded in stock prices.
Deep dives
Passive Strategies Dominate Market Assets
Passive strategies, including index funds and ETFs, now account for the majority of assets in the US market, with approximately 40% market share globally. The success of passive investing can be attributed to its cost efficiency, lower fees, and greater tax efficiency compared to active management. While cap-weighted indexes dominate, allowing opportunities for active investors, the cost story of passive investing remains compelling, posing challenges for active managers to compete effectively.
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