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Underperforming Actively-Managed US Funds Over Past 5 Years

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Over a third of a trillion dollars has been taken out of actively-managed funds in just the US alone over the past year. At the same time, an even larger amount has gone to passively-managed funds. One of the biggest concerns previously was the high prices of these funds as well as their recent poor performances. However, it was assumed that the long-term performance of some outweighed their short-term performance. Now, passive funds are appearing to do better in every category. This could play into the hands of robo-advisors as they can focus on passive fund management, something that inherently lacks significant human involvement anyway. Regardless, the shift in capital will lead to major changes within the financial industry.

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