Is passive investment inflating a stockmarket bubble?

Illustration: Satoshi Kambayashi

Jan 14th 2026|4 min read

In 2016 researchers at Bernstein, a broker, published a note entitled “The silent road to serfdom: why passive investing is worse than Marxism”. A decade later the revolution is still in full swing. Trillions of dollars of capital have poured from actively managed investment funds into those that simply track market indices, and the flow shows no sign of stopping. As much as 60% of net assets overseen by American equity funds are in such passive vehicles, estimates the Investment Company Institute, an industry group.