Active mutual funds are slowly bleeding out to ETFs and index funds. CNBC argues that an economic recession might be needed to revive organic interest in the stock pickers, who need to prove they can outperform the market when it counts.
“If I’m an active manager, it does not make sense to cut fees 50%. They have vehicles still throwing off cash even though they have been in net outflow mode for the past decade. The biggest problem is the slow bleed.” “We are heading down an ongoing path where more money flows into ETFs than in the past,” said Todd Rosenbluth, director of mutual fund and ETF at CFRA.