As the active versus passive debate continues to drag on, analysts are increasingly looking at the effect the rise of passive investing is having on the market’s structure and the efficiency of capital markets.
It is impossible to deny that passive investing and products that follow a passive strategy have been the greatest success story in the financial world since the financial crisis. According to research from Bank of America, since December 2008 passive funds will have attracted a cumulative $1.6 trillion in funds by early next year compared to active funds, which have seen cumulative outflows of around $400 billion between the end of 2008 and the second quarter of 2016.

