Chris Hestelow / Are Passive Funds The REAL Bubble? Ep 525

Almost 40% of the S&P 500 index fund sits in just 10 stocks. Yet, low cost, passive index funds are often marketed as a way to invest in many things at once.9 of the 10 companies are directly exposed to the AI-thematic - something that may, or may not be a bubble, depending on who you listen to.They say the performance of actively managed funds, after fee, rarely outperform passive funds. So, does that mean we should park our intellect at the door?Chris Hestelow, Investment Specialist at Allan Gray*, talks to me about the 'Passive vs Active' debate, AI concentration risks in index funds, and reflexivity/dynamic feedback loops that distort true price discovery in markets.Book in a free 15-min phone call with Darcy Ungaro (financial adviser).Sign up to the fortnightly newsletter!*I may recommend Allan Gray funds in the course of providing KiwiSaver or investment advice. Thank You Swyftx: With over 1 million customers across New Zealand and Australia. Ask yourself …”Where can crypto take you?". Check out Swyftx.Provincia: Whether you're looking to invest, or you have a commercial property that needs better management - they the true one-stop shop for wholesale industrial investors. Check out Provincia.co.nz for more.Affiliate Links!The Bitcoin Adviser: Plan for intergenerational digital wealth.Hatch: For US markets.Revolut: For a new type of banking.Sharesies: For local, and international markets.Loan My Coins: Bitcoin lending product.Exodus: Get rewards on your first $2,500 of swapsGet Social:Check out the most watched/downloaded episodes hereFollow on YouTube , Instagram, TikTok: @theeverydayinvestor, X (@UngaroDarcy), LinkedIn.www.radicalinvestment.co.nz________________________Disclaimer: Please act independently from any content provided in these episodes; it's not financial advice, because there's no accounting for your individual circumstances, and nothing we say is intended as a recommendation. Do your own research, and take a broad range of opinions into account. Ideally, engage a financial adviser / pay for advice!