{
  "id": 10625974,
  "title": "Index funds make active managers worse",
  "url": "https://urgent.news/2026/09/29/index-funds-make-active-managers-worse",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-29T06:02:18.000Z",
  "source": {
    "name": "Klement on Investing",
    "slug": "klement-on-investing",
    "url": "https://klementoninvesting.substack.com/p/index-funds-make-active-managers"
  },
  "original_language": "en",
  "account": "The rise of index funds has had an unintended consequence, making active managers less effective, according to a recent study. Passive funds now account for 20% of US stock market capitalisation, surpassing actively managed funds in assets under management by 2020. Hannah Unterberg from UC Irvine found that the outflows from active funds since 2008 have led to a significant decline in the performance of these managers. The four-factor alpha of active funds, both gross and net of fees, started to decline in 2010, with a more pronounced effect on funds with higher active share and more concentrated portfolios. While Unterberg's research does not prove causation, the correlation suggests that the increasing dominance of index funds may be negatively impacting the performance of active managers.",
  "summary": "‘Blame it on the index funds’ is a popular game when it comes to analysing market concentration and the extreme valuations of US megacaps.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}