Passive investments now control nearly half of the US stock market

Pbadive investments now occupy nearly half of the stock market, with more and more investors avoiding stock pickers and index funds.

ETFs generally charge significantly lower management fees than mutual funds, many of which employ managers to buy and sell shares, with the aim of outperforming major indices such as Dow Jones Industrials. Average and the S & P 500. during the day as stocks.

Critics of index funds say they are too sensitive to changes in a few stock market stocks, virtually ensuring that investors do not generate alpha, while potentially presenting liquidity risks in times of stress in the markets.

Despite the opposition, it is not just the stocks where pbadive investing is making its way.

According to BofAML data, indexation gained a significant market share in fixed income securities, including high-yield and high-yield funds.

Pbadive funds now account for 25.3% of the total bond market, up one percentage point from June 2018. High quality index funds now account for 29.9%, up from 29.7% while high-yielding securities rose to 13% from 12.9%.

Equity funds, however, recorded the largest gains in a period when the stock market rose more than 320% from its lows in the financial crisis. The stock pickers struggled to get the best base returns throughout the race. According to BofAML, about 43% of companies outperformed in 2018, one of the best years since the start of the rally in 2009.