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The passive investment bubble
Author(s) -
Tokic Damir
Publication year - 2020
Publication title -
journal of corporate accounting and finance
Language(s) - English
Resource type - Journals
eISSN - 1097-0053
pISSN - 1044-8136
DOI - 10.1002/jcaf.22437
Subject(s) - bubble , investment (military) , business , balance (ability) , monetary economics , passive management , capital (architecture) , finance , capital market , financial system , economics , fund of funds , market liquidity , mechanics , medicine , politics , political science , law , physical medicine and rehabilitation , history , physics , archaeology
Since the 2008 financial crisis, investors have significantly increased their allocation to passive investment vehicles, such as the exchange traded funds. At the same time, the active investment funds experienced significant outflows as their performance underperformed the major indices. As the result of these capital flows, the market participation balance potentially changed, which increased the possibility of a market bubble—which some already define as the passive investment bubble.