3 brutal charts explain everything that is going on in money management right now
The flow of money from actively managed funds to index-trackers is one of the dominant themes in finance right now.
US exchange-traded funds now have close to $2.4 trillion in assets, according to the Investment Company Institute.
Actively managed funds, in contrast, have been losing assets at a fast clip, with active equity funds seeing close to $150 billion in outflows so far in 2016. Hedge funds, meanwhile, continue to struggle. There has been a net $77 billion outflow from the hedge fund industry so far this year, according to eVestment.
Performance, or the lack thereof, is at the heart of this. Actively managed funds offer the promise of alpha, or benchmark beating returns. The problem is that they're failing to deliver that. Let's look at the charts.