47: Trillions: Who should invest passively and why? With Robin Wigglesworth, Financial Times’ Global Finance Correspondent

Sep 30, 2021

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Over the past decade, about 80 cents of every dollar that has gone into the US investment industry has ended up at Vanguard, State Street, and BlackRock. As a result, the combined stake in S&P 500 companies held by the Big Three has quadrupled, from about 5 percent in 1998 to north of 20 percent today.

Those lines are from a new book - Trillions- Why Passive investing beats Active written by our guest today, Robin Wigglesworth, the Financial Times Global Finance correspondent

In this conversation, Robin explains the forces that drove the creation of the passive investing industry, the key architects and the roles they played, how he shows that passive beats active in developed markets over time, but the controversy and dangers emerging from this financial tsunami and where we might be going.

Robin brings to life the determination of men like Jack Bogle (Vanguard) who championed passive investing “The math will never let you down”, to Paul Samuelson, William Sharpe and Warren Buffet, who has long argued the merits of passive investing in the S&P 500.

Robin concludes - The exact statistics vary between countries and types of market that they invest in, but roughly speaking, only 10 to 20 percent of active funds beat their benchmarks over any rolling ten- year period. In other words, investing is a rare walk in life where it generally pays to be lazy and choose a cheap passive fund.

This Episodes Themes and Collaborations Learn more about Robin Wigglesworth, the Financial Times' Global Finance Correspondent. Jack Bogle transformed the investment management industry. Bogle was a crusader for individual investors, working to bring the interests of asset managers in line with those of their investment clients. Delve into why Paul Singer thinks index funds are devouring Capitalism. A piece in which Robin agrees with Warren Buffetts’ unconventional views on ESG Investing. Recommended reading, by Robin Wigglesworth: Trillions- Why Passive Investing Beats Active Relevant to Robin Wigglesworth talking about the most fertile ground for active management is the emerging markets episode with Dr Christina McGuire. The Money Maze Podcast is going on its second programme of ambassadors and if you know of any students or young working adults interesting in applying please forward them this website link. Hopefully we can keep you entertained and loving the show but to ensure this happens in the future, please would you do this survey to let us know your thoughts and feedback.