Something is badly wrong with the investment industry. It was highlighted in the first half of the last century, if not also in the century before. But what is wrong?
Investors have been being screwed for a long time (excuse the vernacular – but this needs stating clearly, so no one is left in any doubt). The evidence of problems wasn’t ignored by everyone. It spurred on the development of index tracking funds, to the extent that passive investing is now a dangerous bubble phenomenon (see Boom Bubble Bust Part II: ETF Mania).
This means investors now have the guaranteed mediocrity of passives/index trackers, or the high probability of mediocrity, at best, from actively managed funds – or at least 92% of them, as our own research highlights. [read more]