Skip to Content
Fund Spy

Tick, Tick, Tick: For Active Funds, It's Time to Adapt (or Die)

In the future, the active-fund industry must shrink, cut prices, better-align with investors, and differentiate.

  • Despite already losing ground, active funds are vulnerable to further incursions by low-cost passive funds.
  • Passive funds could capture another 10 percentage points of market share in the next decade or so.
  • To adapt, the active-fund industry must shrink, cut prices, better-align with investors, and differentiate.

Past, Present, Possible Future
Actively managed funds accounted for about 63% of U.S. open-end and exchange-traded-fund assets on May 31, 2017. Only three years prior, it was around 72%. 
Source: Morningstar Analysts

To view this article, become a Morningstar Basic member.

Register for Free