Does passive investing distort the markets?

Since the depths of the financial crisis there has been a “great cost mighration” as Eric Balchunas of Bloomberg Intelligence puts it.

Recently Moody’s predicted that, by 2021, passive assets are set to overtake active assets

Given this shirt, there has been a deluge of misinformation about the impact of increasing passive ownership on the markets. Here’s a really nice article by Larry Swedroe dispelling the notion that increasing passive ownership is distorting the markets:

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Can you explain difference between active assets and passive assets.