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Expand chart
Data: Bank of America-Merrill Lynch; Chart: Axios Visuals

Less than half of actively managed funds are beating their benchmarks this year, but that's the second-best rate since the financial crisis, according to data from Bank of America-Merrill Lynch.

Why it matters: Stock pickers have performed much better against their respective Russell indexes the last few years than they had in the years immediately following the crisis. However, they've had significantly less money to invest and less competition.

  • In 2018, mutual funds saw the highest yearly outflows on record, and Moody's expects passive investing vehicles to hold more assets than actively managed funds by 2021.
  • Around 15% of ownable shares of S&P 500 companies are now held by passively managed funds, BAML's data shows.
  • Currently, 44% of funds in the U.S. are passively managed, vs. 56% actively managed, but the passive share has more than doubled since 2009.

Some good news for active managers: "Stock-picking is making a comeback," notes Savita Subramanian, BAML's equity and quantitative strategist. "For the first time post-crisis, stocks are now more differentiated (less correlated with each other) than sectors are with one another, suggesting picking stocks matters more than picking sectors."

  • "Persistently better performance may help stem outflows from active."

Go deeper: Investors tire of hedge funds, but keep them for the downturn

Go deeper

Why made-for-TV moments matter during the pandemic

Photo illustration: Sarah Grillo/Axios. Photos: Erin Schaff-Pool, Biden Inaugural Committee via Getty Images

In a world where most Americans are isolated and forced to laugh, cry and mourn without friends or family by their side, viral moments can offer critical opportunities to unite the country or divide it.

Driving the news: President Biden's inauguration was produced to create several made-for-social viral moments, a tactic similar to what the Democratic National Committee and the Biden campaign pulled off during the Democratic National Convention.

Updated 8 hours ago - World

Over 3,000 detained in protests across Russia demanding Navalny's release

Russian police officers beat protestesters at a rally against of jailing of oppositon leader Alexei Navalny in Moscow on Saturday. Photo: Mikhail Svetlov/Getty Images

Police in Russia on Saturday arrested more than 3,300 people as protesters nationwide demanded that opposition leader Alexey Navalny be released from jail.

Details: Demonstrations began in the eastern regions of Russia and spread west to more than 60 cities.

Updated 10 hours ago - Politics & Policy

Arizona Republicans censure Cindy McCain and GOP governor

Combination images of Cindy McCain and Gov. Doug Ducey. Photo: FilmMagic/FilmMagic for U.S.VETS/Michael Brochstein/SOPA Images/LightRocket via Getty Images

Arizona Republican Party members voted on Saturday to censure prominent GOP figures Cindy McCain, Gov. Doug Ducey and former Sen. Jeff Flake (R-Ariz.), who've all faced clashes with former President Trump.

Why it matters: Although the resolution is symbolic, this move plus the re-election of the Trump-endorsed Kelli Ward as state GOP chair shows the strong hold the former president has on the party in Arizona, despite President Biden winning the state in the 2020 election.