Inflows into index mutual funds in 2013 were double the amount of their previous best year, reaching $115 billion. According to the ICI, inflows surpassed the previous high of $61.1 billion set in 2007. Meanwhile, flows into active strategies were a mere $38.3 billion. Flows into ETFs — coming mostly from retail and institutional investors — topped $180 billion. A spokesperson for Vanguard said that most of the flows into index funds were driven by retirement.
Any hope for active mangers in 2014? According to a report by P&I, this year could be better if markets get rockier and there is a higher level of “dispersion” (the difference between the best- and worst-performing stocks). At the same time, publicly traded fund companies that focus on active management, like T. Rowe Price, Legg Mason, JP Morgan, Invesco and Franklin, reported good or even record years; others like BlackRock and BNY Mellon that focus on dual strategies did well too.
