ETFs & the future of asset management
The shift towards passive investing is likely to accelerate as investors realise the difficulty of outperforming an index.
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THE use of passive investing products has been a growing part of the industry for some time, but a number of drivers are coming together to accelerate investors' use of these offerings and drive assets under management (AUM) growth in these products to new levels of significance.
As a result, the industry is being forced to rethink the definition of and delivery of active fund management. Chronic underperformance from active fund managers relative to benchmark indices has resulted in an accelerated shift of investor capital out of actively managed and into passively managed funds.
By all measures - flows, AUM and market share - passive fund management is now growing at a rapid pace and active fund management is in retreat.
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