Passive investments change market structure and market behaviour

Prof. Dr. Bernd Meyer, Chief Investment Strategist, and Ulrich Urbahn, Head of Strategy & Research, shed light on the impact of increasing passive investing on market structure and behavior.

The importance of passive investments continues to grow. They enable investors to invest quickly, cost-effectively, and supposedly without disadvantage in different asset classes, regions, or segments, even if underlying securities are not very liquid. However, their growing importance is leaving its mark on the behaviour of the overall market and individual securities. Passive investments are one of the drivers of the continuously changing market structure. With a focus on equities, we high-light the key implications of passive investing that investors need to be aware of. However, many findings also apply to bond markets. For active investors, this de-velopment also creates opportunities.

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Prof. Dr. Bernd Meyer
Chief Investment Strategist and Head of Multi Asset
Phone +49 69 91 30 90-225
Ulrich Urbahn
Head of Multi Asset Strategy & Research