Apologies for the light posting – back to more frequent material soon.
In the meantime, further signs of despair for active managers from Shannon Zimmerman at Morningstar:
So far in 2012, passively managed domestic-equity funds have trumped their actively managed rivals in more ways than one. In addition to outperforming–albeit by modest margins–in most areas of the U.S. stock market for the year to date through Aug. 6, index mutual funds and exchange-traded funds have enjoyed substantial net inflows so far in 2012, too. Meanwhile, actively managed funds as a group continue to hemorrhage assets.
Through June, the broad universe of actively managed U.S. stock funds has shed nearly $50 billion in 2012, en route to what seems a certain sixth consecutive year of net redemptions. On the passively managed side, however, investors have sent more than $41 billion to domestic-equity vehicles so far this year.
While this might sound fairly positive, when you take into account the fact that a passively managed portfolio requires a few people and a computer, and can scale up to hundreds of billions with essentially that tiny infrastructure, that’s not very promising news for the people who rely on active management fees for their rather comfortable living. Perhaps if they actually delivered alpha…