What Are The Implications Of The Shift Towards Passive Funds?

Rupert Hargreaves

Published onNovember 3, 2016

Updated on May 14, 2021

What are the implications of the shift towards passive funds? That’s the question JP Morgan’s global asset allocation analysts attempt to answer in last week’s issue of the bank’s Flows & Liquidity research report.

JP Morgan’s research shows that close to 30% of US domiciled funds are now following passive strategies. The benefits to investors from following passive strategies are clear -- lower fees and higher returns (compared to the indexes) are the most cited advantages -- but what about the disadvantages of such a heavy passive allocation?

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Rupert Hargreaves

Sign up now and get our in-depth FREE e-books on famous investors like Klarman, Dalio, Schloss, Munger Rupert is a committed value investor and regularly writes and invests following the principles set out by Benjamin Graham. He is the editor and co-owner of Hidden Value Stocks, a quarterly investment newsletter aimed at institutional investors. Rupert owns shares in Berkshire Hathaway. Rupert holds qualifications from the Chartered Institute For Securities & Investment and the CFA Society of the UK. Rupert covers everything value investing for Hedge Fund Alpha

What Are The Implications Of The Shift Towards Passive Funds?

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