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topic: efficient markets and personal finance Why do active investors as a group hold the passive...

topic: efficient markets and personal finance

  1. Why do active investors as a group hold the passive (market) portfolio?
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Answer #1

Active investors as a group hold the market portfolio which is a form of passive investment because this active investment are trying to protect themselves and it can be acting as a hedge also.

Active managers are always looking for or managing their funds actively by readjustment and realigning them with the overall index sometimes so they are also holding the funds and they just try to replicate index because they want to hedge their positions on the active front and passive investment will never underperform the market because of similarity to that of Index so they will try to go for investment but only as a group .

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