Eh, the money is going in and eventually coming out over lengthy timescales. If active management means dipping into a smaller number of tradable assets, then t

Eh, the money is going in and eventually coming out over lengthy timescales. If active management means dipping into a smaller number of tradable assets, then the effect would only be worse. If they have to split it between a large number of active managers with different strategies because their fund is too big, then they might be de facto indexing the broader market while paying over the odds for it. For assets traded on an exchange at least (e.g., not directly-invested real estate), it's more of a logistical problem than anything else: how do you track indices that you want to track by dripping money into and out of the market, both trying not to affect supply/demand too much, but while not deviating from the index too much. It's the same problem that a BlackRock or Vanguard face but at slightly smaller (!) scale, and one more for computer programmers with knowledge of market microstructure than people that demand outsize bonuses who think they have "alpha" and get lucky (or not).