Ken Griffin explains why the rise of passive investing only works as long as active managers keep doing the research that sets prices “So what’s very interesting is the rise of passive investing plays to the realization that markets are either efficient or semi-efficient." "And it’s a way for investors to have low-cost exposure to either broad indices, to the world as a whole, or to specific sectors without having to pay the fees of active management." "It’s been revolutionary for the world, this embracing of passive investing. But passive investing only works if there’s a meaningful community of people involved in fundamental research who are helping to set the pricing of securities." "So passive investing requires the existence of capable, successful, and competitive traditional asset managers for the theory that underlies passive investing to actually play out, to actually manifest itself." "So the rise of short-term investors helps to ensure that markets are efficient with respect to news that’s rapidly evolving. But we should really try to make sure that we take every step possible to make it that traditional asset managers have the ability to have prosperous and successful firms because they are so critical in the price discovery process that passive investing depends upon.”