Even BlackRock Thinks Active Management's Days Are Numbered

BlackRock, the world’s largest asset manager and parent company of the iShares exchange traded fund line, is redefining its stock-picking process as it begins to rely more on robots or automation rather than emotional human decisions on buys and sells.

The money manager’s stock-picking unit, which depends on active management teams to select investments, has underperformed the competition and has suffered large redemptions as investors pull out, reports Sarah Krouse for the Wall Street Journal.

Clients have yanked money from the actively managed stock-picking unit in three of the past four years, with $275.1 billion in active stock assets under management at the end of 2016, compared to $317.3 billion three years prior.

A growing number of traditional money managers and active fund managers are seeing investors pull their investments. Consequently, more will have to adapt if they want to stay relevant.

“Stock pickers won’t disappear, but like NYSE floor traders, there will be fewer of them,” Bob Pisani said on CNBC.