More active managers are beginning to generate alpha in an extended bull market environment but traditional open-end mutual funds are still bleeding assets. Meanwhile, investors continue to favor low-cost, easy-to-use exchange traded funds.
U.S. mutual funds experienced $4.5 billion in outflows over the past week, bringing the cumulative outflows to more than $150 billion year-to-date, compared to $162 billion in outflows for the same period last year, reports Robin Wigglesworth for the Financial Times.
Since November 2016, U.S. mutual funds tracked by EPFR have not seen a trace of inflows and their cumulative outflows over the past decade has now crossed the $900 billion marker. In contrast, U.S. ETFs have enjoyed $880 billion in inflows over the period.
“These are strong headwinds,” David Lafferty, chief market strategist at Natixis Global Asset Management, said. “While active managers have always competed against each other, they have never had to confront a threat of this magnitude.”