Share of U.S. Equity Mutual Fund and ETF AUM Passive U.S. equity funds surpassed active ones in 2020. Investors prefer them due to their lower fees, potential tax benefits, and the belief that active fund managers cannot consistently outperform the market. Image: Goldman Sachs Global Investment Research
Active vs. Passive Fund Flows The trend of investors shifting from active to passive funds has accelerated significantly over the past decade, driven by cost considerations, performance outcomes, and evolving market practices. Image: Goldman Sachs Global Investment Research
Active Global Equity Fund Flows and % MSCI ACWI Members Trading Above 200-DMA Flows to active global equity funds correlate strongly with stock price dispersion. Higher dispersion creates more opportunities for active managers, especially in volatile markets, boosting investor interest and inflows. Image: BofA Global Investment Strategy
Cumulative Passive and Active Equity Flows While active equity funds have faced significant challenges, passive equity flows have shown resilience, remaining positive despite market fluctuations. Image: BofA Global Research
U.S. Domiciled Funds: Active vs. Passive as a % of Assets Under Management Passive accounts for 54% of all U.S. domiciled fund assets, highlighting the significant growth and popularity of passive investing strategies in recent years. Image: BofA US Equity & Quant Strategy
Flows by Year into Active vs. Passive Funds Passive funds are growing in popularity as investors prioritize lower fees, potential tax advantages, and doubt active fund managers’ ability to consistently outperform the market. As a result, active funds are facing capital outflows. Image: BofA US Equity & Quant Strategy
Passive vs. Active Rolling 6-Month Flows Flows into passive mutual funds and ETFs continue to surpass those into active funds. This trend is driven by factors such as lower costs, strong performance, and the rise of ETFs. Image: Goldman Sachs Global Investment Research
Beta Exposure of Large Cap U.S. Active Managers vs. S&P 500 Among active managers, there is a significant drop in beta exposure to GFC levels. Image: BofA US Equity & Quant Strategy
Active Global Equity Flows Outflows from active global equities persist. Image: BofA Global Investment Strategy
Active vs. Passive ETFs Will actively managed ETFs continue to shine in 2021? Image: Bloomberg
% of Large Cap Active Funds Outperforming Russell 1000 Benchmarks in May Best May in history for actively managed large-cap funds. But can active large-cap funds outperform benchmark over a full market cycle? Image: BofA US Equity & Quant Strategy