Practical analysis for investment professionals
18 December 2014

Will Passively Managed Assets Continue to Grow Relative to Actively Managed Assets in 2015?

While actively managed funds still account for 83% of global assets under management according to recent Morningstar data, passively managed funds have been gaining ground in recent years. This shift has been especially pronounced in the US equities space, where passively managed funds have experienced net inflows and actively managed funds have seen net outflows in each year since 2006. The failure of active managers to consistently beat the market is undoubtedly one factor behind the trend toward passive investing. In the United States, fewer than one in five active equity fund managers were beating the market this year through October, their worst showing in over a decade. We asked CFA Institute Financial NewsBrief readers if they expected this trend to continue in 2015.


Will Passively Managed Assets Continue to Grow Relative to Actively Managed Assets in 2015?

Will Passively Managed Assets Continue to Grow Relative to Actively Managed Assets in 2015?


A majority of 574 respondents, 77%, answered in the affirmative. They likely agree with Greenwich Associates founder Charley Ellis, CFA, who recently argued that when it comes to active investing, the “party is over.” Taking the contrarian view, 15% expect a reversal of fortunes for stock pickers, perhaps hoping that an increase in volatility and dispersion among stocks will offer them a chance for redemption.

Do you want to participate in future polls? Sign up for the CFA Institute Financial NewsBrief.

If you liked this post, consider subscribing to the Enterprising Investor.


Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.

About the Author(s)
David Larrabee, CFA

David Larrabee, CFA, was director of member and corporate products at CFA Institute and served as the subject matter expert in portfolio management and equity investments. Previously, he spent two decades in the asset management industry as a portfolio manager and analyst. He holds a BA in economics from Colgate University and an MBA in finance from Fordham University. Topical Expertise: Equity Investments · Portfolio Management

2 thoughts on “Will Passively Managed Assets Continue to Grow Relative to Actively Managed Assets in 2015?”

  1. The biggest problem with the shift to passive funds is that Vanguard, Northern Trust, BlackRock, Fidelity and others have little incentive to monitor their portfolios and take an active role in challenging management and boards. Since they hold diverse portfolios, any benefit they could obtain through such actions would equally benefit competitors, while they would bear all the costs (free rider problem).

Leave a Reply

Your email address will not be published. Required fields are marked *



By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.

Close