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Via Jefferies:
Only 43 per cent of energetic fairness managers are outperforming their benchmarks as of [November 30] — a measure that has solely been above 50 per cent for 3 of the final 10 years and never since 2017

Jefferies additionally highlights that as of end-October, property beneath administration for US-based ETFs and index funds exceeded the retail energetic AUM for the primary time:

To common readers neither of these charts will likely be shocking, however connecting the themes does give us an excuse to spotlight one delicate curiosity: passive fund flows are the mirror picture of energetic fund flows.
It’s a much-studied pattern that mutual funds collect property initially of a calendar yr. Investors put apart year-end bonuses or search to maximise tax advantages, then as December approaches they pull funds to reap tax losses or dodge distribution tax. There’s some proof that the flip of the yr acts as a immediate for traders to note how a lot they’ve misplaced.
But for ETFs the fourth quarter is the whole lot. Jefferies reckons the seasonality increase relative to common quarterly internet circulation in a given yr throughout all domiciles is 32 per cent, and 44 per cent for these with a US domicile:


Even this under-emphasises how a lot passive flows are weighted in direction of December:

Why? Dunno. Having discovered no helpful tutorial analysis on the ETF circulation seasonality and positioned nobody keen to enterprise a concept, we are able to solely speculate that it’s a screw-you impact.
Maybe the tip of yr galvanises traders to ditch underperformers and minimize prices, which exhibits up faster in ETF knowledge than in mutual fund factsheets. The common energetic fund constantly underperforms its benchmark, whereas ETFs and index funds principally are the benchmark, so at any time when the year-end scores are logged it’s an invocation to maneuver funds from the previous to the latter.
Now that we’ve handed the active-to-passive tipping level (no less than for US-domiciled funds), will the withering speed up or degree off? And will the primary driver of all funding exercise, tax avoidance, develop into extra seen in passive flows?
Or perhaps the screw-you impact is nonsense and there’s a a lot better rationalization for ETF seasonality, by which case the remark field is open.
Further studying
— Back into the energetic/passive trenches (FTAV)
https://www.ft.com/content/d7d4b190-fe07-4fa3-9b42-164f4eee3c6b