More Pain for Active Management

Active management needs triage. Stat!

Active management needs triage. Stat!

It’s fine to loved, fine to be hated, but awful to be pitied. Active management just can’t catch a break, and the low cost industry flood has index funds flowing.

On Monday, Chicago-based research big Morningstar reported estimated mutual fund and exchange-traded fund  asset flows for July. Active equity funds surpassed the estimated $21.7 billion in outflows in June, with $32.9 billion exiting in July.

All passive category groups, however, saw inflows during the month, led by $33.8 billion in inflows to passive equity funds. Morningstar estimates net flow for mutual funds by computing the change in assets not explained by the performance of the fund and net flow for ETFs by computing the change in shares outstanding.

Highlights from Morningstar’s report about U.S. asset flows in July:

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