Among mutual fund analysts, John Rekenthaler is one of the best. A Morningstar veteran, he writes a regular, must-read column. So I was surprised to read the first sentences of a recent piece: “Do active funds have a future? To cut to the chase: Apparently not much.”
Rekenthaler is as dead serious as, in my view, he is dead wrong. Look at his case: Over the 12-month period that ended June 30, 68% of new fund investments have gone into index mutual funds, index exchange-traded funds and other passive strategies (passive means a human is not picking the stocks and bonds). A mere 32% of fresh cash went into actively managed funds — those run by well-paid managers who decide what to buy and sell.
