Boston, September 14, 2017 – Ever since the global financial crisis, passively managed index funds have attracted increasing amounts of investors’ dollars. This structural shift in fund flows was primarily due to the low fees these products charged and to actively managed funds’ disappointing performance. But a new option, dubbed “smart beta,” has caught the asset management industry’s attention, and strong fund flows have gone into this newfangled investing strategy for the past three to five years. How sustainable is the trend of new investing dollars going into each of these categories of funds?
This report compares active and passive investing over the past 10 years regarding fees, fund flows, and investment performance; defines active, passive, and smart beta investing; and makes some general predictions about future trends in the asset management business. It is based on mutual fund and exchange-traded fund data provided by Morningstar Direct as well as on perspectives gathered from qualitative interviews with seasoned professionals since 2017 at various organizations.
This 53-page Impact Report contains 30 figures and six tables. Clients of Aite Group’s Institutional Securities & Investments service can download this report, the corresponding charts, and the Executive Impact Deck.
This report mentions AlphaSense, BlackRock, Bloomberg, Connotate Technologies, FactSet, MFS Investments, Morningstar, MSCI, Research Affiliates, S&P, State Street Global Advisors, Thomson Reuters, Vanguard, and Wall Street Horizon.