Active US funds suffer worst outflows ever

Traders work on the floor of the New York Stock Exchange.
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Active fund managers may be having their best year performance-wise since the financial crisis, but investors don't seem to care.

Mutual funds that rely on active strategies, i.e., picking stocks and moving in and out of positions, suffered their worst 12-month period ever in terms of money flows, according to Morningstar. U.S.-focused funds in that category surrendered $156 billion during the period.

That marks a huge contrast with passive funds that track various indexes such as the Russell 1000, and the Nasdaq. That family of funds took in more than $150 billion during the period, Morningstar reported Thursday.

The difference in total assets remains heavily weighted toward active U.S. equity funds, which have $3.8 trillion under management compared to $2.4 trillion for passive in the $17 trillion mutual fund industry.

But the trend toward passive is clearly picking up.