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Tuesday, November 13, 2018|
Do Index Fundsters Face Growing Headwinds?
Fundsters running index funds face growing investing headwinds, at least in the eyes of one of the six chief investment officers at a top active mutual fund shop, T. Rowe Price.
The challenge Giroux sees for passive management in the coming years, he says, is that the "number of attractive industries and companies is shrinking," as more and more industries (think cable, retailers, advertising) face painful shifts. Passive managers, by virtue of tracking indexes, have to stay invested in industries and companies that face such headwinds (while active managers like T. Rowe can avoid them).
"Secular risk is growing," Giroux says.
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