The business of picking stocks and bonds for clients is getting smaller by the day.
In the second quarter, that group of seven saw $34bn in outflows. The tally is further evidence that investors, frustrated with high fees and mediocre performance of actively managed funds, are increasingly casting them off for low-cost passive investments. In the 12 months ended September 30, active funds had redemptions of $295bn while passive took in $454bn, according to data from Morningstar.
“The shift from active to passive is an accelerating secular trend,” said Benjamin Phillips, a principal with the consulting firm Casey Quirk by Deloitte. “It is not going away.”
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