The rising tide of foreign portfolio flows increased the money supply under the currency peg and pushed up property prices even more. A number of small economies in East Asia have market weightings totally out of proportion to their economies because these economies have listed everything from flats to roads. These weightings tend to trap portfolio money, but if benchmark investing goes out of fashion, money will flow out of these economies quickly. The resulting financial pressure may push them toward reform. Many people in the finance business make a good living by chanting 'Don't Fight the Trend'.
Nothing covers up mediocrity like an upward trend.
As the world slides into a period of slow growth, problems are exposed. When the trend is not a straight line, there is no reward in following an index. A huge shakeout in the investment business may be coming . Absolute performance may become the dominant investment strategy. This change will certainly make life tough for everyone in the finance business.