Patrick O'Shaughnessy on the Next Big Thing in Passive Investing
Odd Lots
Bloomberg
4.5 • 2K Ratings
🗓️ 6 September 2021
⏱️ 49 minutes
🧾️ Download transcript
Summary
Passive investing is kind of boring. You dump your money in an index fund and that's it. The industry hasn't really seen big innovation since ETFs were invented in the 1990s. Enter custom indexing. Custom indexing allows asset managers to create bespoke indices for their clients. Interest in the space is already booming, with Morgan Stanley, BlackRock and JPMorgan all making acquisitions in the space. But what exactly is the difference between investing in a custom index versus something like the S&P 500? And why haven't custom indices been done before? On this episode we speak with Patrick O'Shaughnessy, CEO of OSAM and the host of the podcast "Invest Like the Best", about direct investing.
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| 0:50.7 | Hello and welcome to another episode of the Odlots podcast. I'm Tracy Alloway. |
| 0:55.9 | And I'm Joe Weisenthal. So Joe, it's been a while since we've talked about passive investing. |
| 1:03.9 | And I can't decide if that's just because so much else has been going on in the world, |
| 1:09.6 | including a global pandemic. Or if it's because passive investing itself seems to have gotten |
| 1:19.1 | a little boring, like it doesn't feel like there's that much happening in the space. |
| 1:24.0 | Well, I know I've said it before, and I don't remember the last thing we talked about it, |
| 1:28.3 | but I know I've said it before that in the post-grade financial crisis period, |
| 1:32.9 | it felt like there was just this overwhelming message. There's like through the media, |
| 1:37.5 | marketing, and academic research. It's like, just go passive, just go index, whatever, |
| 1:43.6 | forget about your investments. And it really feels like in the last couple of years, |
| 1:47.6 | even before the pandemic, but now especially since the pandemic, it's like there's been the like |
| 1:53.2 | revenge of active management and individual stock selection and Robin Hood and crypto and all |
| 1:58.1 | that. And it's like this like repressed desire to trade and invest an individual name to just come |
| 2:03.8 | like raging back. So I guess that sort of asked the question. It's like, okay, well then like |
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