Investors Have Pulled $109 Billion From Active Equity Funds In 2016: Here’s Why

Jon Alternative Media, Blogosphere, Market Commentary

Update: Approprirately enough, moments ago Bloomberg blasted the following:
HEDGE FUND OUTFLOWS IN JULY LARGEST SINCE 2009: EVESTMENT At some point, all these cumulative redemptions will force hedge funds to start selling.
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2016 has been another bad year for the hedge funds community in particular, and active managers in general (despite the previously noted rebound in performance since the end of Q2 on the back of short covering and major releveraging). The best representation of this comes courtesy of JPM’s Dubravko Lakos-Bujas, who shows that investors have pulled more than $109 billion from active US equity funds YTD. While they are the clear losers in the capital allocation race, the winners are passive equity funds which have captured a whopping $35 billion of inflows, as more and more investors seek to take the simpler, cheaper-managed option (even if it is one which assures their investing career will on day end in tears).

This post was published at Zero Hedge on Aug 24, 2016.