Apollo Global Management and Citadel have expressed concerns about the increasing dominance of passive investment funds, citing potential hidden costs associated with this trend.

It is suggested that relying more on passive investing could result in higher market volatility and reduced liquidity. On the other hand, Citadel, led by Ken Griffin, argues that regulators may be underestimating the significance of active managers, which could impede their growth in the current market environment.

The popularity of US exchange-traded funds (ETFs), a key element of passive investing, has surged, with record net inflows of $913 billion this year, bringing total assets to over $10 trillion. This growth is largely attributed to the strong performance of the US stock market, raising concerns about the long-term implications for active management strategies.