Matthew Hudson, CEO of asset management consultancy firm MJ Hudson, has claimed passive investing is "near the top of a bubble", which is set to burst as early as the end of 2018.
In his investment outlook for the year ahead, Hudson said although passive AUM will continue to grow as a percentage of market share throughout next year, it is set to collapse "once interest rates and volatility increase". "Having watched the passives industry grow from nothing into something massive, there is also fundamentally an existential problem with it. "You have got to have active management for passives to exist. There needs to be a balance and passives are getting too big. "Passives are a momentum play and the bubble must burst at some point," he said. Strong growth i...
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