, Columnist
Active Managers Are Suffering a Perilous Pandemic
The failure of stock pickers to outpace their benchmarks poses an existential risk to the active fund management industry. It turns out their bond counterparts are equally bad.
A volatile market.
Photographer: Johannes Eisele/AFP via Getty images
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The failure of equity fund managers to deliver outsize returns commensurate with the fees they charge for their stock-picking services continues to be a source of ammunition for advocates of lower-cost index tracking products. Less scrutinized, although equally dreadful, is the seeming inability of their bond brethren to offer a fixed-income alternative that can generate benchmark-beating performance.
Hence the existential crisis that still threatens the entire active fund management industry.