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Core Perspective: The Passive allocation dilemma

“This is the second part of a series of presentations which aims to “Ask the right questions” about investing and the role passive plays in achieving better outcomes for investors and society. To date the focus has been on finding the optimal split between passive and active. However, these “quantitative” approaches rarely look at the causes behind the shift to passive strategies and their broader implications. In this presentation we will look at the passive allocation dilemma facing fund selectors which arises from the “market is all active” research we covered in the first presentation. We unpack some of the risks associated with intermediation and give an example how one could overcome these by using an appropriate financial planning framework.”