Show Notes
Passive flows into index funds and ETFs have dominated the last decade, and most people read that as the end of active management. The position here is different: the market did not kill a category, it killed a price point. What died was the commodity middle, large cap US equity charging 80 basis points for benchmark hugging, while scarcity based strategies like private credit, emerging market debt and small caps kept growing fee related earnings at firms such as Apollo and Ares.
You leave with a sorting test for every product line, access or outcome, a warning about crowding into private credit as fees drift from 1.5% toward 1%, and the Morgan Stanley case for owning the relationship through Eaton Vance and E-Trade.
0:00 Why passive flows killed closet indexing 0:46 The commodity middle lost the price point 1:09 Where active still earns fees: private credit, EM debt 2:12 Secular versus cyclical: the CFO misread 3:09 Access or outcome: the fee stickiness test 4:06 Margin moves to distribution and advice
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