It's good that you highlight this. The problem is likely to get worse unfortunately. The percentage of total AUM in active mutual funds dropped to 46% as of September 2021, but if the current trend continues it will drop to 17% by 2035, and the active management industry will disappear altogether by 2050. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4539706
Pretty wild. Although I would think that at some point in these next 25 years there will be some market/global events that lead to active investors having the upper hand for a moment.
However, whether it will be enough to disrupt the larger trend is the question. I'll be sure to check out that paper. Thanks.
It's good that you highlight this. The problem is likely to get worse unfortunately. The percentage of total AUM in active mutual funds dropped to 46% as of September 2021, but if the current trend continues it will drop to 17% by 2035, and the active management industry will disappear altogether by 2050. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4539706
Pretty wild. Although I would think that at some point in these next 25 years there will be some market/global events that lead to active investors having the upper hand for a moment.
However, whether it will be enough to disrupt the larger trend is the question. I'll be sure to check out that paper. Thanks.