In a article published this week in Les Echos, Sophie Rolland raises the expansion of passive funds over active funds and how these are fighting against the development of passive funds.
For a few years now, active funds face competition of passive funds. According to Moody's, by 2025, passive management will represent over half of the American market.
However, active funds managers have severals way to fight against this growth of passive management. Management firms are developing new strategies such as the use of "mid caps", they divesify their funds and they increase their active shares.
Questioned on that topic, Guillaume Prache, Managing director at BETTER FINANCE warned of the danger of these "Closet indexers" (investment firms that charge high fees for active management but closely mimic their benchmark). In its study published in February 2017, BETTER FINANCE found that more than 40% of funds do not publish the performance of the benchmark index in comparison with their fund performance.
Read the Full article here ( in French)