2025-12-28 12:20:43

Recently, I heard an interesting phenomenon: over the past year, nearly 1 trillion USD has been withdrawn from active equity funds, marking the 11th consecutive year of net outflows. In contrast, passive exchange-traded funds (ETFs) have attracted over 600 billion USD.

Why is this happening? There are two main reasons: first, the performance of active funds hasn't been particularly impressive; second, their fees are high. Investors are becoming increasingly clear that spending so much money to hire fund managers who still can't beat the index isn't cost-effective.

Interestingly, although passive funds have attracted a large amount of capital, they also face their own challenges. Passive funds are locked into tracking indices and can only follow the market. What does this mean? When a few giant stocks (those with extremely large market caps) drive the entire market upward, passive funds can only follow suit, unable to make any adjustments.

This massive transfer of funds, in simple terms, is the market voting with its feet, forcing the entire industry to rethink where its value lies.

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ser_ngmi

· 8h ago

How disappointing has the seller's fund manager been over these 11 years? Luckily, I went all-in on passive investments early on.

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ParanoiaKing

· 8h ago

Damn, how has active fund managers survived these 11 years, always getting chopped up by retail investors? ETFs are winning big, but being stuck in the index is pretty awkward, just watching the giants pump the market. Spending a lot of money to hire fund managers is not as good as just buying ETFs yourself, I've really come to realize that. Passive tracking, to put it simply, is that market concentration is increasing, and small-cap stocks are completely falling apart. The index is failing, fund managers are failing, investors should be crying now. Who still trusts active funds now? The fees are ridiculously high, and their performance is still poor.

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DEXRobinHood

· 8h ago

Wow, active funds have been losing money for 11 years straight and are still charging fees? Isn't this just harvesting retail investors? Fund managers can't even beat the index and still have the nerve to ask for high fees. That's hilarious. Passive ETFs have attracted 600 billion yuan in funds; this is the market voting with its money. Wait, are passive funds also problematic? They all follow giant stocks, isn't that also very risky? It seems that when it comes to investing, you still have to figure things out on your own.

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rug_connoisseur

· 8h ago

Haha, fund managers are finally being taught a lesson by the market. An 11-year net outflow is no joke. Passive funds are also a joke, only holding onto big company stocks stubbornly, with no flexibility at all. I just want to know what those high-fee fund managers are thinking now, being crushed like this. Instead of trusting them, it's better to just buy ETFs directly, saving money and hassle. This wave of transfer shows that investors are finally not stupid anymore and have recognized the reality.

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MagicBean

· 8h ago

Haha, this is the end for those fund managers. They still want to rely on high fees to make a living. Passive funds are not that great either, just follow-the-leader machines. Honestly, I've long since all-in on index funds, it's hassle-free. It feels like the future will be a game between big funds and retail investors. This wave of transfer is really a supply-side reform. Fund fees are ridiculously high, they can't beat the index, no wonder they are abandoned. The popularity of passive funds is absurd, it’s like accepting defeat and losing money with the giants. After eleven years, there are still net outflows. Some managers should reflect on themselves.

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