This brutal table explains everything that is going on in money management right now

The investing world is changing.

Money is flowing quickly from actively managed funds to index-tracking funds. Hedge funds are under pressure, with investors yanking an estimated $25.2 billion from these funds in July, according to eVestment.

At the root of all of that is performance. Yes, index trackers are cheap and tax efficient, but active funds have the potential to outperform the benchmark, delivering superior returns.

The problem is that they’re failing to do this.

The table below from JPMorgan’s latest equity strategy note from Dubravko Lakos-Bujas and co puts this in stark terms. More than two thirds of all active managers are underperforming their benchmark, with 41% missing by more than 250 basis points.


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