• We believe the zero-sum game argument is flawed because it neglects that active managers can potentially outperform passive market-weighted indices by trading with other types of active investors and profiting at their expense without violating the zero-sum game. 
• The rise of neo passive investors in the form of smart beta, sector funds, and passive ESG strategies can create opportunities for active managers on the other side of any of their trades to outperform a market-weighted index.
• The holes in the zero-sum argument give large and sophisticated institutional investors a rational framework for deciding whether, where, and how to deploy active management. 

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