European active equity funds saw a turnaround in net flows during 2017, enjoying a rise of €135.8bn in net new money to €62.7bn, after suffering an outflow of €73.1bn in 2016, according to Morningstar data.
The active versus passive debate could be history by 2025, according to Blackrock’s Joe Parkin.
Everyone has heard about the bitcoin bubble; Neil Woodford has warned of a new tech bubble; and now investors are voicing concerns about a passives bubble. But if such a bubble exists, is it ready to burst? Or will index funds continue to steal market share away from their active peers?
Europe’s passive funds will be given a boost in 2018 at the expense of active funds thanks to Mifid II’s drive for transparency on costs, according to research firm Cerulli Associates.
If fund managers seek to deliver consistent alpha, they’d better refrain from pushing too many buttons, says Rob van Wechem, head of investments at private bank Oyens & Van Eeghen in Amsterdam.
As the number of passive products in the emerging markets space increases, active fund managers need to outperform to justify their fees, argues a report by Cerulli Associates.
The last 10 years have seen ETF products grow from pre-teens to fully fledged adults, even dabbling with drugs along the way. 7IM’s passive expert and senior investment manager Peter Sleep looks back at the biggest trends.
With the exception of funds tracking the US and UK mid caps, no passive funds have been able to generate first or second quartile performance in their respective sectors over the past 10 years, according to research from Chase de Vere.
The French asset manager Amundi has attracted most net inflows from European investors year-to-date, narrowly beating Blackrock into second place. A resurgent Pimco saw the biggest amount of flows into active funds, according to Morningstar data.
Following the French elections, investors have swapped actively managed single country equity funds for index trackers.
The rise of the passives looks unstoppable. Since 2008, assets in exchange-traded funds have increased from $772bn (€685bn) to almost $4trn, according to BlackRock. But this doesn’t mean active managers are cornered.
It is no secret the average active fund manager struggles to outperform consistently. Corporate governance is an obvious area where active managers can still prove their value.
