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Passive investing boom could be causing a market bubble, but not in the stocks you would expect

davfordavfor
edited July 2019 in The Bullpen
Something to think about when considering what fund groups might suffer more than usual during a substantial downturn.
Ned Davis Research....found that real estate and utilities stocks are the two sectors that have benefited the most from the rise of passive investing vehicles including exchange-traded funds. ETFs hold more than 11% of the real estate sector and 9.8% of the utilities sector.

At the individual stock level, Tanger Factory Outlet Centers, a real estate company that invests in shopping centers, has had nearly 32% of its available stock, or float, taken over by ETFs, by far the most of any stock.

“Tanger Factory Outlets is the real crowded theater, where investors might get trampled rushing for the exit,” said Will Geisdorf, ETF strategist at Ned Davis Research, in a note. “Tanger Factory Outlet Centers (SKT) is the poster child for the passive bubble,” he said.

https://cnbc.com/2019/07/27/passive-investing-boom-could-be-causing-a-market-bubble-but-not-in-the-stocks-you-would-expect.html
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