More than the idea that active management seems to be turning a corner, sources say, it might be that passive management has had its day.
The latest Pensions & Investments/Willis Towers Watson study of the 500 largest money managers in the world found that the share of assets in active strategies grew during 2015, to 78.3% as of Dec. 31 from 77.8% the previous year.
A total $24 trillion was run in active and passive strategies, according to data provided for the study, down 3.4% compared with 2014. However, active strategies' share of the total declined 2.8%, vs. a 5.5% drop in assets run in passive strategies.
“Passive became an interesting and relevant approach over the last decade, and there is always a certain percentage of pension funds that moves toward it because they think it is the right thing to do,” said Ben Gunnee, Mercer Ltd.'s head of fiduciary management for the U.K., based in London. “It has absorbed a good portion of the funds that want to do it. I think we may have reached saturation point of those that are going to use it.”