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Investors withdrew $207b from money managers in 2015, while pouring $414b into passively managed funds, highlighting a sea of change in the asset management industry. The withdrawals represent the first net outflows since the 2008 financial crisis.
Clients yanked $207.3 billion in 2015 from U.S.-based mutual funds that hand pick their positions while pouring $413.8 billion into funds that mimic broad indexes for a fraction of the cost, according to new data from research firm Morningstar Inc. Most of the withdrawals, roughly $169 billion, were from funds that research individual U.S. stocks. The outflows represent a stark change in investor attitude toward equities as investors wrestle with new stresses in a bull market that has lasted nearly seven years. The Dow Jones Industrial Average fell 2.2% on Wednesday and is down 7.3% for the year. “The tone is definitely different” among clients, said Steve Dudash, president of IHT Wealth Management in Chicago. “For the first time in a long, long time, clients are really concerned. I mean, calling at 6:30am, wanting to talk about the markets.”
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