Passive investing grew because interest rates declined from 20% to zero, which created a massive boom in equity performance and made the 60/40 portfolio the default investment strategy, not because passive investing is a new innovation.

Passive flows have created a momentum effect that is now one of the primary drivers of market performance, suggesting passive itself has become a source of systematic risk.

From 1968 to 1982, a 14-year period, investors lost 70% of their money in equities whether holding short or long duration, and passive investing did not exist during that period because it didn't work.