Text size The asset management industry has gotten used to money shifting to passive out of active and to ETFs from mutual funds. However, that trend could slow next year, writes Barron’s. Based on feedback from 40 advisors and brokers from U.S. retail investment distributors including independent RIAs, IBDs, insurers and banks, Credit Suisse found that the average advisor’s portfolio mix was 52% in active, 39% passive, and 9% alternative. Net new asset mix for the September quarter was about 48% active, 41% passive, and 10% alternative, roughly the same as the June quarter. “So unless the [net new asset] mix shifts significantly higher to passive over the next six months, we think this is another indication that the active-to-passive rotation could slow in the US in 2018,” wrote analyst Craig Siegenthaler. Of the largest public and private companies, financial advisors scored BlackRock the highest. Vanguard took second place, and T. Rowe Price third. “We view these ratings as a function of fund performance, distribution scale, breadth/quality of product and size of marketing budget,” wrote Siegenthaler.
Financial intermediaries may be moving money from active to passive funds, but the trend could potentially slow down next year. The net new asset mix among various intermediaries for the third quarter of this year was 48% active, 41% passive and 10% in alternative fund strategies, according to research from Credit Suisse. This mix represented roughly the same breakdown from the previous quarter, with Credit Suisse concluding that unless there's an uptick in net new assets shifting to passive in 2018, the trend of fund flows to passive funds could slow down in the next six months.