The End of Indexing: Six structural mega-trends that threaten passive investing

by Niels Jensen

Let me give you just one example. If (when) tariffs are raised on international trades56, shipping goods as cheaply as possible would become more important than ever. Low-cost shipping implies larger container ships, though, and many container ports are not deep enough to facilitate the largest containerships now in operation. This means that there will be plenty of excavation work to come in container ports around the world, and it will be up to the government in question to ensure that returns on those infrastructure projects are high enough to attract capital from institutional investors. Once the UK has left the EU, a number of UK ports will be prime candidates for work of this nature. In the private sector, if governments find ways to increase the momentum of aggregate demand growth, equities could perform quite well for a time – at least until investors realise that the increase in aggregate demand has come at the cost of reduced corporate profit growth.