Their discussion was sparked by venture capitalist Marc Andreessen, who said firms like BlackRock Inc. have outsized voices in many corporations because of the voting power of their stable of passive index trackers.

Musk, chief executive officer of Tesla Inc., replied that passive investing has “gone too far.” Wood, who founded Ark Investment Management LLC, took up the conversation, noting that investors in S&P 500 trackers would have missed out on big gains in Tesla before it was included in that index.

“History will deem the accelerated shift toward passive funds during the last 20 years as a massive misallocation of capital,” Wood said.

Wood is one of the most high-profile active managers but has suffered a bruising year, with her flagship ARK Innovation ETF slumping almost 45%. Tesla, meanwhile, is among the major companies where the likes of indexing pioneer Vanguard Group or BlackRock are among the top shareholders.

The debate over active and passive funds has raged for decades. Active managers tout their performance potential and role in creating the efficient markets tracked by passive funds. Others say active styles struggle to beat indexes consistently and levy high fees compared with cheap trackers.