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PASSIVE ATTACK

The rise of the passives looks unstoppable. Since 2008, assets in exchange-traded funds have increased from $772bn to almost $4trn, according to BlackRock. But this doesn’t mean active managers are cornered

Investment strategies Passive versus active

Active managers have been in the frontline of the passive assault for a number of years, with investors shifting money from expensive active funds to cheap index trackers, especially in US and Japanese equities. European equities remained under active manager rule until last year. But 2016 was a year of disaster: a record €58bn was taken out of actively managed European domiciled European equity funds over the year. These outflows were mainly due to deteriorating sentiment, but redemptions from European equity ETFs were only a fraction of those from actively managed funds (at slightly over €4bn). The question is, of course, whether active managers will ever see this money flow back in again.

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