Ideas & Insights Our Advisors Our Teams Resources White Papers eBook Market Statistics Model Portfolios Important Documents Recommended Readings Calculators What We Do Who We Are Our Story Our Board Members Management Team Governance & Internal Controls Compliance Safe-Keeping your Assets World Class Partners Research Department Perspective Newsletter Careers Contact Us Evidence Based Investing The Passive vs. Active Fund Monitor (2017) Download this Document Published: 2017-04-13 This report describes the competitive landscape for passively and actively managed funds over the last eleven years in Canada and the United States. In 2016, Canadian passive funds increased their market share from 10.5% to 11.3% on the back of a positive flow of nearly $11 billion. Meanwhile, Canadian active funds attracted $10 billion. Passive flows outpaced active flows for the first time since 2012. Over the same period, passive funds increased their share of the U.S. market from 30% to 34%. U.S. passive funds have attracted $490 billion, in stark contrast with outflows of $326 billion for active funds. Since 2007–2008, Canadian passive funds have doubled their market share from 5.6% to 11.3% and have attracted $62 billion in net new money, compared to $47 billion for active funds. Since 2006–2007, U.S. passive funds have more than doubled their market share from 16% to 34% and have attracted a $2.8 trillion net money flow, compared to a modest $735 billion for active funds. Overall, passive funds are gaining ground both in Canada and the U.S. with the help of steady inflows of money. However, the Canadian passive fund industry remains modest relative to the U.S., where passive funds have grown at such a high pace that they are posing a threat to the active fund industry. Finally, we believe the rise of passive funds in general and the corresponding decline of active funds represents a significant transfer of wealth from the financial services industry to the retail investors, as actively-managed funds charge average fees that are much higher than passively-managed ones and yet appear to under-perform. Download this Document Contributors Raymond Kerzérho ,CFA, Director of Research Author Raymond contributes to PWL with his thirty years of experience in investment strategy and fixed income portfolio management. Related White Papers Evidence Based Investing Five Factor Investing with ETFs Published: December 23, 2020 Evidence Based Investing The Value Premium: Fact or Fantasy? Published: November 24, 2020 Evidence Based Investing Dollar Cost Averaging vs. Lump Sum Investing Published: June 23, 2020 View All White Papers IIROC AdvisorReport Ideas & Insights Our Advisors Our Teams Resources All Resources White Papers eBook Market Statistics Important Documents Model Portfolios Recommended Readings Calculators Checklists What We Do Who We Are Our Story Our Board Members Management Team Governance & Internal Controls Compliance World Class Partners Research Department Contact Us Client Login PWL Wealth Centrenew My Portfolio + FR
Raymond Kerzérho ,CFA, Director of Research Author Raymond contributes to PWL with his thirty years of experience in investment strategy and fixed income portfolio management.