Passive funds continued to gain market share last year, yet their news wasn't all good.
| Eric Balchunas|
Senior ETF Analyst, Funds Product Specialist
Net inflows into passive mutual funds and ETFs reached $395 billion for the first 11 months of 2018, even as fund investors pulled $150 billion in net outflows out of active funds (not counting money market funds), Bloomberg reports
, citing Morningstar
data. Yet that put passive funds on pace to end 2018 well behind the nearly $700 billion (a record) in inflows they netted in 2017. In other words, the great passive boom is slowing down. (Stay tuned for more detailed flows data later this month.)
That trend holds for two asset management titans that have been the biggest winners of the passive boom, who both saw their net inflows on track to roughly be cut in half. Vanguard
brought in $168 billion in net inflows for the first 11 months of 2018, Bloomberg
notes, compared to the $329 billion it brought in for all of 2017. And BlackRock
brought in $108 billion in passive inflows in the first 11 months of 2018, down from $213 billion for all of 2017.
also includes some other flows tidbits, including details about two other titans as well as a prediction that, in 2019, assets in passive U.S. equity mutual funds and ETFs will surpass those in active U.S. equity funds. And Eric Balchunas
, senior ETF analyst and funds product specialist at Bloomberg, noted that "you tend to see passive gain market share share in difficult environments," while active fund investors panic.
Neil Anderson, Managing Editor
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