The end of active management ?

As today’s chart shows, only 10% of NYSE trading is now driven by active managers — down from 80% in 1995. At the same time, more than half of global equity assets are now passively managed.

This shift goes against a cornerstone of our philosophy: that stock prices should reflect the fundamentals of the businesses behind them. But when flows dictate prices and passive dominates, true price discovery begins to break down.

That said, we also acknowledge the weaknesses in our industry — high fees and poor performance have discredited many active managers.

But with so few fundamental investors left, the opportunity to uncover mispriced businesses is more compelling than ever.