Moody’s Warns In Two Years Passive Is To Overtake Active Which Is Now Like Playing Poker

Investors’ increasing preference for passive investment products over active ones has been well-documented in recent years, and the trend has been accelerating. Moody’s now estimates that passive products may overtake active ones in only two years. The firm also explained why over time, it could become even harder and harder to find an active manager capable of outperforming their benchmark.

Q4 hedge fund letters, conference, scoops etc

In a report this week, Moody’s Investors Service compared the transition from active to passive products to the adoption of new and improved technologies. Senior Credit Officer Stephen Tu and team said passive products “more efficiently channel the earnings of corporate America to the end investor than do traditional mutual funds.”

Active management compared to playing poker