This post is more of an experiment than anything from reading James Hymas’ May 25, 2016 post. A successful result will be me being sent a spam email by a robot. This is probably one of the most rarest times where receiving spam is a positive result!
On May 19, 2016, IGM Financial invested $50 million in Personal Capital, which is a robo-investing corporation.
Just so there is some information content in this post, there is clearly a scale where passive investing will deliver inferior absolute returns in relation to active managers. Although I have not done the detailed analysis (in terms of obtaining reasonable data in terms of capital flows and such), I would suspect we have already reached this point. Too much capital that is attracted to the main equities (TSX 60 and the like) will likely result in under-valuations in less liquid portions of the market – especially when there are market corrections and robotic investors decide to liquidate “roboticly” – i.e. without regard to price.