During the last 15 years, passive strategies have attracted almost all net inflows in equity funds in Sweden, now accounting for 22 percent of all equity fund assets. Compared to other countries, this trend shows no signs of slowing. Passive investments have increased fee competition as well as given retail investors access to cheap and diversified market exposure. But is there a societal cost connected to the rise of indexation?
Paul Huebner will present the findings in a recent research paper. Some of the issues addressed are:
- Has the increased indexation affected the stability and robustness of the market?
- Are there any measurable effects on efficiency, volatility and liquidity in the stock market?
- Does the growth of passive strategies increase or decrease the risk of investment bubbles and is there need for regulation?