A view of the market movements between January 1, 2024, and December 31, 2024, shows that it is fair to say that this period was a period in which active fund managers could have shown their asset selection and timing skills since the equity markets were driven by a number of different factors. Each of these factors could have caused a major market downturn on their own. There were a lot of geopolitical tensions around the globe beside the war in Ukraine, which showed that democratic states are more vulnerable than one may think. With regard to this, the political

In the U.S., mutual fund and ETF assets earmarked for funds dedicated to responsible investing (RI, aka ESG, sustainable, socially responsible, or impact investing) practices only accounted for 1.3% (+$371.3 billion) of the assets under management (+$29.225 trillion). Nonetheless, the number of RI offerings continues to grow as investors search for strong risk-adjusted returns while staying true to their ethical, moral, sustainable, and religious convictions. At year’s end, there were 802 ETFs or unique conventional funds (excluding share classes) flagged in Lipper’s database as being committed to RI practices. This means these funds have stated goals of not just considering

Given the current economic situation around the globe it was no surprise that the European fund industry faced declining assets under management over the course of the year 2022 so far, as the geopolitical situation in Europe, the still ongoing COVID-19 pandemic, disrupted delivery chains, increasing inflation, and interest rate hikes put some pressure on the securities markets. Within this environment, the assets under management in the European fund industry decreased from €15.3 tr (as of December 31, 2021) to €13.3 tr at the end of Q3 2022. While ETFs held €1.2 tr, or 9.23% of the assets under management

The U.S fund business added 185 unique new funds (including ETFs but excluding share classes) in Q3 2021. And despite the popularity of passively managed funds, 143 of those funds were actively managed. Collectively, these new funds attracted some $7.4 billion in net inflows for Q3, with new actively managed funds (+$4.8 billion) outdrawing new passively managed funds (+$2.6 billion) for the quarter. Perhaps more interesting given the recent focus on Responsible Investing (RI) fund trends—which includes funds with traditional socially responsible investing strategies, ESG investment strategies, impact investing strategies, and the like—fund families added 42 unique RI funds to

The way active managers thought and spoke about ETFs changed when ETFs started to gather significant assets under management. At the beginning, ETFs were seen as a gimmick that would be used by a small number of investors. As time went by, however, active investors realized that ETFs have the power to eat out a large portion of their revenues and so they started to say ETFs represented a threat for the financial markets. As a result, there were several investigations from market regulators on the impact of ETFs on markets in times of turmoil, as well as on more

It’s fair to say that 2020 was a year like no investor has experienced before, even looking back to the Great Depression or World Wars I and II. The year began with fears of a possible war between North Korea and the U.S., an upcoming trade war between the U.S. and China, and a possible hard Brexit. In a normal year, these geopolitical tensions would have put enough pressure on the markets to cause a major downturn. But in mid-February, the coronavirus, which had previously been seen as a local problem in China, was detected in an increasing number of

Looking back on the year 2020, it can be said that no investor has seen such a year before, even if one looks back to the Great Depression or World Wars I and II. The year started off with fears about a possible war between North Korea and the U.S., an upcoming trade war between the U.S. and China, and a possible hard Brexit. In a normal year, these geopolitical tensions would have put enough pressure on the markets to cause a major downturn. But in mid-February the coronavirus, which has been seen as a local problem in China before,

Despite the deteriorating situation with regard to the COVID-19 pandemic, December 2020 was another positive month for the European fund industry since the promoters of mutual funds (+€99.1 bn) and ETFs (+€23.5 bn) enjoyed inflows. The high level of inflows was surprising since there were some uncertainties around the outcome of the presidential election in the US and a possible hard Brexit. In addition, investors fear a second coronavirus lockdown-induced economic downturn in Europe. Despite these fears, investors bought into risky assets as long-term funds enjoyed estimated net inflows of €90.6 bn, while money market products had estimated inflows of

Despite the market turbulence caused by the outbreak of the novel coronavirus and the following COVID-19 pandemic induced lockdowns of economies around the globe, the year 2020 seems to be a successful year for the European fund industry. Even as the final numbers are not accounted yet, it looks like 2020 will be the year with the second highest overall inflows into mutual funds and exchange-traded funds (ETFs) in Europe (€449.69 bn as of November 30, 2020). That said, not all fund promoters in Europe might agree with this view, as the year showed strong fund flow trends which didn’t

Active fund managers are permanently under scrutiny in the ongoing debate about the value added by active management compared to passive products such ETFs and index funds. The debate is often driven by a view on management fees, with critics arguing that actively managed funds are too expensive and do not in most cases deliver any value added for their investors. This argument is correct if one only looks at performance tables measuring the relative performance of an actively managed fund versus its benchmark since only a minority of active managers are able to achieve an outperformance relative to their

The perennial debate over passively versus actively managed funds continues. Historically, both camps have offered sound reasoning for embracing one investment practice over the other. But they both might be right. Relative Performance: Active vs Passive On one hand, the argument goes, investors benefit from the low expense ratios and low portfolio turnover of passively managed funds, which bring passively managed mutual funds’ and ETFs’ total returns very close to their index benchmarks. However, in about 84% of the relative performance observations (fund return minus the benchmark return), passively managed funds underperformed their benchmarks after taking expenses and cash drag

For the fund-flows week ended February 19, 2020, investors were once again net redeemers of large-cap funds (including ETFs), withdrawing a net $3.1 billion. Large-cap mutual funds witnessed net outflows of $2.3 billion, while their ETF counterparts handed back some $752 million. Looking back to 2019, we see that large-cap funds were the pariahs of the equity universe, handing back a net $66.2 billion for the year, their third largest net outflows on record. However, the headline numbers are a little misleading. Despite the average large-cap fund (+29.80%) posting eye-popping returns for 2019, large-cap mutual funds suffered net redemptions of