Eric Rosenbaum says that a slow shift away from active funds is hurting the 'divas' of the mutual fund industry. Some experts in the business weighted in at the Morningstar Conference
The financial crisis, skepticism about the financial services industry, and the slow burn of active managers biggest success — baby boomers — are all weighing on the future of active management, Rosenbaum says.
In 2007, Legg Mason
] had upwards of $20 billion in assets, today it has $2.3 billion in assets.
Rosenbaum says the long term outlook will favor passive funds, and Don Phillips, president of Morningstar's investment research division agrees:
The financial crash was the last blow. I don't think it can be reversed. Most of the money still in active funds won't be going away soon—but these fund managers have to deliver to a very skeptical audience. Today, there is no longer manager worship.
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