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What about that “other” big trend: active & passive?

When the Market Moves the Market, Drawdown Edition
Jefferies, Jefferies Equities White Paper, 2020

The biggest story of the last decade (or at least a top three contender) was the rise of passive management. In fact, in 2019 for the first time, passive assets under management exceeded those that are actively managed.25 This trend continued into 2020, but unlike other trends – which many expect Covid to accelerate – in a more moderate manner.

After witnessing exponential growth of passives vs. actively managed funds, at least for recent months, things have tempered somewhat. It is far too early in what has become a completely unpredictable year to gauge whether markets will continue to rise again, which many attributed to one of the factors driving the growth of passive.

Jefferies 1


Given the reminder that the first quarter provided, that the longer periods of underperformance, the greater the outperformance of actively managed hedge funds, it will be interesting to see if flows to passive moderate in the coming months.


25 Morningstar