The Mega-Trend Threats to Passive Investing

Published on
16 July, 2018
Macro, Portfolio Management, Passive Investing
32 minutes
Asset class

The Mega-Trend Threats to Passive Investing

Featuring Niels Jensen

Niels Jensen, the CIO of Absolute Return Partners, outlines six mega-trends which he believes will devastate the performance of passive investing over the next decade. While the timing is difficult to predict, the trends are inevitabilities that will require significant tweaks to long term portfolio construction. Filmed April 19, 2018 in Twickenham, England.

Published on
16 July, 2018
Macro, Portfolio Management, Passive Investing
32 minutes
Asset class


  • HO

    H2 O.

    23 7 2018 04:29

    1       0

    Would recommend his book “The End of Indexing”. There are a couple of chapters that lay out the argument for why passive flows will start to dry up. Yes, there are some pretty consensus views about demographics, etc, but that shouldn’t overshadow the implications for market structure when/if ETF aum starts to shrink.

  • SF

    Simon F.

    21 7 2018 15:11

    1       0

    I wonder whether the linear logic of his assumptions, which are built substantially on historical outcomes and consensus predictions, are such a reliable road map for that greatest of all oxymorons, the foreseeable future? He is right that we have crap demographics and have dragged generations of consumption from the future, but, I think reflexivity and technology will play a substantial part in our attempts to change the course we are on. The whole arc of history would suggest innovation is the reliable mother of invention.

  • NH

    Neil H.

    20 7 2018 17:12

    3       0

    excellent video. I have been reading Niels writings for many years and they are always thought provoking.

  • NO

    Neil O.

    19 7 2018 19:30

    0       0

    Really intelligent and thought-provoking analysis. Great framework, but executing would be very tricky while maintaining some degree of diversification (though I accept this is a much over-rated concept) and variety of exposures. Would seem to be a natural approach for pension funds, the largest part of his firm's client base, who can readily access the necessary specialist managers. Not sure how smaller pools of assets can benefit from this approach. Any ideas?

  • XP

    X P.

    19 7 2018 09:26

    2       0

    Looks like he focuses on institutional investors, but retail can access these same strategies via Blu Family Office. Being able to get income via trade financing and other longer term deals looks very interesting as an alternative not usually available to small investors, as long as you can lock up the capital for a while.

  • JA

    James A.

    19 7 2018 07:03

    1       0

    Great mega long term trends that he identifies and it's hard to disagree with any of the points. As an active investor executing on the ideas is far harder though due to a) timing of trends is so hard to predict and b) access to such investments (I.e. trade finance) is highly specialist and generally only for large pool of capital (family office / pension) and not for those with <$5mn of investable capital .... albeit happy to be proven wrong !

  • GL

    Geoffrey L.

    18 7 2018 17:42

    0       0

    It seems, re: the rise of the east, that their ability to grow is massively dependent on developed countries purchasing their goods and FDI. A global turndown will seem to have a knock on effect (high five, RV) that would seem to mitigate this effect.

  • PD

    Peter D.

    18 7 2018 00:00

    3       0

    His most interesting observation is that if the entire market is crowded into short trades, there must be opportunities in the long end (eg. 5+ year outlooks).

    But (other than buying gold as an inflation hedge) it's hard to identify any good risk-adjusted long-term bets.

  • RK

    Robert K.

    17 7 2018 12:38

    2       0

    Very good interview. Also left me pretty depressed ;)
    Shorting growth against value is something I thought about (and luckily not implemented yet). Maybe we are getting there.

  • KC

    Klendathu C.

    17 7 2018 11:04

    4       14

    Old guy who has seen a debt and demographics chart cries the end of the world is coming. Seen this a hundred times on this platform. New content please.

  • CS

    C S.

    17 7 2018 07:07

    3       0

    Wonder if he had any love for commodities? Perhaps Uranium, if electric was the go.

  • RM

    Russell M.

    17 7 2018 02:27

    11       2

    Time to change the segment music.

  • BM

    Beth M.

    16 7 2018 22:02

    13       0

    Raoul, just wondered why this was filmed in mid-April but not released until mid-July? Excellent interview...thanks.

  • CM

    C M.

    16 7 2018 21:19

    21       16

    "We could relatively easily fix these problems...if we let in more immigrants." Sure, go ahead and blow up one's culture and societal cohesion to satisfy an academic model where the prognosticator has no skin in the game. This chap is hopeless...

  • CB

    C B.

    16 7 2018 19:43

    1       1

    Thank you for sharing your views. I feel like I am hearing a long dollar argument embedded into these views.

  • jS

    jurgen S.

    16 7 2018 19:41

    11       0

    Really liked his common sense approach and his thoughts on how this might all play out.
    I’m glad someone is finally talking about the end of the debt cycle as no one else seems to be.
    Most so called experts all play down the debt but this gentleman nails it.
    Hasn’t heard of him before but loved this one.
    Thanks RV.
    By the way what’s happened to Grant???

  • SM

    Sarit M.

    16 7 2018 15:42

    1       1

    Can retail investors invest in trade finance?

  • SS

    Sam S.

    16 7 2018 13:13

    17       0

    Just Fantastic! Excellent work as macro future and actionable info. Thank you!