Jan 22, 2019

Actively managed funds had their worst month ever

lackRock Investment management company logo seen displayed on a smart phone.

BlackRock Investment management company logo. Photo: Igor Golovniov/SOPA Images/LightRocket via Getty Images

If the deluge of forced exits at BlackRock and State Street didn't paint a clear enough picture of what's happening in the world of asset management, December's Morningstar data certainly did.

The big picture: This is the continuation of a long-running theme on Wall Street. Institutional investors, retail investors, high net-worth individuals and even some endowments and pension funds are consistently moving away from asset managers and into low-fee passive strategies.

  • Actively managed funds saw nearly $143 billion of outflows in December, their worst month on record.
  • Total outflows for 2018 climbed to $301 billion, just below of 2016's record $320 billion of outflows.
  • Investors generally blamed volatility and the down market, but passive funds pulled in almost $60 billion in December, Morningstar's data shows.
  • Overall, long-term U.S. funds had their greatest monthly outflows in December since October 2008, with $83 billion of cashflow moving out of the investments.

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