Hello Ashok,

Thank you for your very kind words! I really like your point that passive strategies must grow on their own merits. I include on that list of merits that they must demonstrate that they actually do beat active strategies based on a truly fair comparison. Depending on the comment stream on this piece I may propose some ways of executing this fair comparison. I also really like your point about there being no underperformance if all money is managed passively. If that were the situation then the definition of underperformance would once more shift back on to the client and whether or not they have achieved their goals. After all, isn't it possible for a passive index strategy to not achieve a client's goals? Say, for example that their goal was to earn an income, yet still retain equity exposure. A very naïve adviser might put them into a passive strategy having heard that such strategies are "the best," end up defeating a suite of active managers, and yet not achieve the income goals of the client? This is an extreme example, but it shows that the client and her goals is the central axis of the investment business, and not just risk-adjusted returns.

Thank you for contributing to the conversation!

Yours, in service,

Jason