When Jack Bogle started the Vanguard 500 Index fund in 1975, I am sure that he never visualized how successful he would be. In the last few decades, passive investing has widened its offerings (to include ETFs and other markets) and has taken away market share from active investing, but the pace of disruption seems to have quickened in the last decade. The best advertising for passive investing is the performance of active investors, who seem to lag their passive counterparts, across time, style classes and geographies. I argue that active investing is destined to shrink as a business and that while there are potentially dangerous consequences to the rush to passive investing, the process has its own correction mechanisms. Finally, even in the face of the evidence to the contrary, I explain my rationale for staying an active investor.
Slides: http://www.stern.nyu.edu/~adamodar/pd...
Blog Post: http://aswathdamodaran.blogspot.com/2...