May 5, 2022
The CEO of Ark, Cathie Wood, deals with Tesla Inc. CEO, Elon Musk, to highlight liabilities with passive investment.
Wood stated that history will regard the accelerated shift toward passive funds as significant during the last 20 years as a "massive misallocation of capital."
According to the Ark Invest research report on "The Big Ideas 2022,”most passive funds are "short" on disruptive innovation at a time.
When the global economy is undergoing the largest technological transformation in the history.
Elon supported this with a statement as "a shift back towards active investment."
This is a matter of concern because active investments are more focused on outperforming an index over time than passive investments.
In passive investment, it aims to match but not beat the performance of an index.