BlackRock Inc. is confirming what plan sponsors have been talking about for the past few months — passive investments like ETFs are experiencing huge growth as the de-risking trend slows and investors seek to reallocate. As they reassess their asset allocation, investors are moving to low-cost alternatives to active funds.
An article today on Bloomberg reports that, during the first quarter of 2010, investors put $4.6 billion into stock index funds and just $900 million into active equity strategies according to BlackRock. Quantitative funds had $8.8 billion in outflows. Investors also put an additional $13.6 billion into index bond funds and exchange-traded funds while they pulled $14.4 billion from active bond funds. ETF assets have ballooned by 67 per cent in the year ended February according to data from the Investment Company Institute in Washington.