Despite headlines declaring its end mise, aggressive investment management is not extinct – it is evolving. Traditional mutual funds may be in decline, but aggressive decisions are shining through new channels of model portfolios, direct indexes and self-service apps. Whether it’s a retail investor who fine-tunes individually managed accounts (SMAs), an advisor who assigns them to the entire ETF, or a fund that selects a specialist manager to meet diverse investment policy requirements, the index is no longer the boundary between passive and active.
Ultimately, investment management is decision-making as a service. What’s changing is who (or what) you are doing, what decisions you are making, the tools used to create them, and how those decisions are being delivered to your end clients. Traditional active mutual funds actually saw a significant outflow of $43.2 billion in the 12 months ended March 31, 2025, but these dollars have not disappeared from the market. According to Morningstar’s US Fund Flow The survey showed that they were primarily revolving into passive vehicles, earning $568 billion during the same period. On the surface, that shift supports the “passive takeover” story. However, in reality it reflects a reconstruction of where and how active selection is expressed.
Beneath the surface, active decisions are more broadly, more diverse and more structurally embedded in the investment environment than ever before.
Under the surface
The packaging of aggressive decisions has evolved beyond traditional mutual funds. A compelling trading app, combined with transaction costs near zero, led to a boom in voluntary investment. Broadridge’s 2024 US Investor Pulse The study spans all generation cohorts. These voluntary investors are increasingly focusing on ETFs and direct equities rather than mutual funds.
Meanwhile, as of June 2024, 79% of US stock investors remained in investment relationships with financial advisors. These advised assets have shifted from mutual funds to ETFs and direct stocks, driven by a surge in SMAS and Unified Managed Accounts (UMA). In particular, SMAS provides unprecedented levels of access, transparency and tax efficiency to individual investors through strategies such as the harvesting of tax LOSS. In other countries, this trend is the same: self-service and personalization of large-scale investment solutions.
sauce: Broadridge US Investor Pulse Study – June 2024
Either way, someone or something is making an active decision.
Voluntary investors want practical control. They are active by definition, but they do not intend to pay third parties for decision-making. Implicitly, they either believe they are superior to experts, they do not value the entertainment of participating in the market, or both.
Conversely, advice channel investors outsource decisions to financial advisors, believing that experts will deliver better results. This is because financial advisors can easily outsource real investment decisions to the expanding universe of their model portfolio, from strategic asset allocation models to tactical thematic strategies and risk targeting solutions. These portfolios include the same active decisions seen in mutual funds without trade enforcement services.
The facility’s allocator will continue to rate the alpha and pay for it. As the indexes become more and more concentrated, these sophisticated investors are returning to active managers for diversification. However, today’s allocators are not appealing due to past performances. They demand evidence of skill.
The industry is responding to these changes. Active equity portfolio managers due to cost-cutting orders are reassessing the labor sector within their investment team. Product strategists apply fresh eyes to the integration of their multi-brand product ranges, assessing quantum and basic strategies side by side. Large companies have integrated previous siloed investment teams to promote collaboration and cross-pollination of ideas. This approach emphasizes the quality of decision-making, whether the signal comes from human insights or algorithms.
Important points
Surface-level data suggests that active fund management is a retreating industry. The dollars flow from aggressive funds to birth alternatives. But beneath the surface, positive decisions are more broadly, more diverse and more structurally embedded in the investment environment than ever before. A must for an active manager is no longer preserved, but adaptation. In markets that demand personalization, transparency, and demonstrable value, relevance depends on the adoption of new delivery mechanisms and decision-making frameworks. The future of aggressive investment is shaped by quiet, strategic and critically evolving people.
