Actively retreating

Active equity investing continues to retreat. Over the last 12 months, cumulative outflows from actively managed global equity funds have reached a record $605bn. At the same time, passive strategies keep gaining market share and increasingly dominate equity markets.
This trend may ultimately create an opportunity for investors who pick individual companies: fundamentals and valuation matter most when capital is allocated with discipline rather than by index weights. In the meantime, however, active funds remain structurally burdened by higher costs, while low-fee passive solutions benefit from scale and from a rapidly expanding product offering well beyond broad, flagship indices.