Investors Embrace Active Management Amid Tariff Volatility

Global investors are favoring actively managed equity funds due to rising market volatility and broader stock market rally. Active equity funds saw a record inflow of $127 billion in the first half of 2025, up 57% from last year, while passively managed funds declined by 8%.

The shift towards active management is driven by U.S. tariffs and geopolitical tensions, creating price dispersion and opportunities for active managers focused on strong companies. A recent survey found 71% of strategists expect continued volatility in equity markets, with many looking to capitalize on opportunities in equities and fixed income.

Financials, telecom, and mining sectors have outperformed the tech sector this year, with the top 10 S&P 500 names now accounting for nearly 35% of the index’s market capitalization. This concentration poses risks for index investors, highlighting the advantages of active managers in navigating market challenges.

Read more at Yahoo Finance: Tariff volatility drives investors to actively managed funds