Passive equity investments have close to the worst risk/reward, largely because they are so accessible so effectively support the creation of vast amounts of wo

Passive equity investments have close to the worst risk/reward, largely because they are so accessible so effectively support the creation of vast amounts of worthless equity (the return on the average US stock is 0% and has been for many decades). Also, most equity indexes are nonsense, in most of the world the state is heavily involved in which companies list so they are and have always been historically and culturally contingent. The reason why this is happening is because some institutions have been extremely successful doing this. I assume you are familiar with the ones like Ontario Teacher's (because they seem to own everything) or endowments but has also been true for Superannuation funds in Australia. In the latter case, they have (I believe) the highest levels of average wealth (higher than the US) but incomes that are lower, largely because of Super funds. Speaking generally, one of the biggest drivers of wealth inequality is that the rich have access to financial products that go up in a straight line, and other people do not...despite "other people" in aggregate holding most of the wealth. Germany is one of the most famous examples of this, GDP per capita is very close to the top ten, median net financial wealth equal to Greece. Saving options are non-existent so everyone is funneled into deposits, and the banks take that money and give it at -2% to a billionaire (whose family got suspiciously and suddenly very wealthy in the 30s). China is effectively the same model but Germany is a bit more notorious...because people continue for vote it. The alternative is Singapore, everyone knows this model cannot work with US politics (to keep it brief). So what is happening is the obvious thing to do. Same thing is happening in the UK under a left-wing government btw. The US is already somewhat ahead of the curve in that their exists a deep pool of people who have decades of experience running funds for savers and institutions this way (again, people in the US miss this context...the UK is doing a similar thing, the issue is that there is almost no-one with this experience). It is right to say plan sponsors should do this, the statements by Biden and Trump quoted are both correct (and not contradictory). As the article points out, DB plans have used these for decades shrug However, there is also stuff here that is also known bad: it sounds like they want to incorporate this into funds that offer daily liquidity...how did CEFs work for PE funds pre-08? Not good (the solace with this kind of thing is that PE funds lose out just as much doing this, it is a bad idea that has failed every time but they just can't resist).