Active Managers Account For Revenues

Active managers may continue to lose market share to passive investment vehicles, but they will continue to account for the bulk of industry revenues, says a report from ISS Market Intelligence. Over the next five years, index funds are projected to capture a growing share of U.S. long-term assets under management (AuM), reaching 55.6 per cent by 2027, it says. Active fund assets are expected to grow only half as quickly, rising at just a 3.5 per cent average annual rate. Yet, active managers will still account for most of the industry’s revenues as active funds now generate more revenue per dollar of AuM than they did 10 years ago. It estimates that active mutual funds will account for almost 80 per cent of industry revenues through 2027, despite their market share declining over the same period.