Historically, many funds made their bread on charging management fees for beta, and now that index funds can do the same thing but at a much lower price, they're going to go extinct.
I'm not suggesting that you put all of your money into one name, on the contrary, I think an index tracking ETF should make up the majority of one's portfolio. Maybe 20% should go into bonds or pure alpha and maybe 20% should go into 3 or 4 single name bets.
Institutional investors nowadays are doing something very similar. A core of their portfolio is now cost passive maybe with some smart beta tilt. The rest is allocated into bonds or pure alpha, whill a small portion is put into high conviction equity bets or hedge funds with beta exposure. This allows them to significantly reduce their management feels.
I'm not suggesting that you put all of your money into one name, on the contrary, I think an index tracking ETF should make up the majority of one's portfolio. Maybe 20% should go into bonds or pure alpha and maybe 20% should go into 3 or 4 single name bets.
Institutional investors nowadays are doing something very similar. A core of their portfolio is now cost passive maybe with some smart beta tilt. The rest is allocated into bonds or pure alpha, whill a small portion is put into high conviction equity bets or hedge funds with beta exposure. This allows them to significantly reduce their management feels.