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Active vs. Passive? It Doesn’t Matter.

July 31, 2017 : Permanent Link

(Harvest) The debate between stock-picking active and index-based passive management has been raging for years. So far, the momentum is all on the side of passive managers. BlackRock, Vanguard, and State Street occupy the top spots on the AUM tables, each passively managing trillions of dollars. Meanwhile, traditional stock-picking active managers have been hemorrhaging assets. According to Morningstar research, U.S. passive mutual funds added $492bn in 2016, whereas active managers have shed $204bn. These numbers are for open-ended mutual funds and don’t include ETFs or the shift in institutional assets, where the same trends are underway.

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